Antam?s net jumps 171 percent on higher commodity prices
Saturday, May 1 2004 - 02:11 AM WIB
As well, Antam was able to hold the cost of sales to a 10% increase, while operating expenses decreased 12%. The improved performance increased operating profit by 189% to Rp218 billion (USD26m) and widened Antam?s operating margin to 39% from 19% in the previous corresponding period.
Antam?s consolidated revenue in first quarter 2004 rose 41% to Rp566 billion (USD66m). Antam?s nickel division was the largest contributor as revenues increased 81% to Rp439 billion and accounted for 78% of sales, up from 60% in the corresponding period of 2003. Ferronickel increased 90% to Rp222 billion and accounted for 39% of total revenues, larger than the 29% of first quarter 2003.
Sales of saprolite and limonite nickel ore increased 73% to Rp217 billion and accounted for a larger 38% of revenues.
The revenues from the gold division, which includes gold, silver and precious metals refining, dropped 27% to Rp88 billion and provided a smaller portion of sales at 16%. Combined revenues from bauxite and iron sands accounted for a smaller portion of total sales at 6% compared to 10%, as bauxite sales decreased 27% to Rp25 billion and despite iron sands revenue increasing 237% to Rp13 billion.
However, Antam warned that in the second semester of 2004, it would decrease its ferronickel production due to the planned full overhaul of FeNi II smelter.
While increased sales volumes were a factor, the major reason for increased revenues from the nickel division is due to the higher average selling prices of Antam?s nickel products. The average price Antam charged for its nickel contained in ferronickel rose 66% over the first quarter of 2003 to USD6.12 per pound, while the weighted average selling price Antam charged for its saprolite and limonite nickel ores rose 26% to USD31.88 per wet metric tonne (wmt) and 87% to USD23.46 per wmt, respectively. Antam?s nickel prices are based on the spot price for nickel, with a one-month trailing average used for calculating ferronickel and the average of the previous quarter used in determine nickel ore prices. The spot nickel price rose to a 14-year high of USD7.76 per pound on January 5th, 2004 on the back of strong global demand, especially due to Chinese growth, and limited supply.
Ferronickel sales volumes were on target, increasing 20% to 1,927 tonnes, on the back of increased production of 1,929 tonnes. Antam?s 2004 sales target for ferronickel is 7,908 tonnes. Production increased despite a planned two-week shut-down for spot-lining repairs on FeNi II smelter due to a more consistent power supply after the rental of power generators from GE, and included 107 tonnes through toll smelting with Pamco of Japan. Nickel ore sales volumes also rose, outpacing increased production, as saprolite increased 18% to 572,755 wmt and limonite, which includes low grade ore and low grade saprolite ore (LGSO), increased 119% to 309,708 wmt. Saprolite and low grade sales volumes were slightly below target, while sales of the higher priced LGSO surpassed the quarterly target. Increased limonite sales volumes were attributed to the start of exports from the Tanjung Buli mine. The 2004 sales targets for saprolite, low grade and LGSO are 2.5 million wmt, 0.9 million wmt and 0.5 million wmt respectively.
Although the average selling price of gold and silver increased by 19% to USD416.86 per t.oz and 49% to USD7.18 per t.oz respectively, revenues from the gold division decreased. Production of gold from Pongkor decreased 18.5% to 842kg, or 80% of the quarterly target and silver decreased 12% to 6,226kg, exceeding the quarterly target. The decrease in sales volumes exceeded that of production, as gold and silver sales fell by 36% to 658kg and 45% to 5,588kg respectively. The annual production targets for gold and silver are 4,176kg and 24,280kg respectively. Lower production and sales volumes were caused by a toxic fire that began March 2, 2004 in a tunnel dug by illegal miners, which adjoined an abandoned area of the Pongkor gold mine.
The average selling price of bauxite was the only price decrease during the quarter, falling 2% to USD10.84 per wmt, due to the lower quality bauxite Antam exported from the Kijang mine, which recently had its mine life extended after Antam?s customers agreed to purchase the high-silica bauxite still available at the mine. Sales volumes decreased 22% to 272,497 wmt, or 84% of the quarterly target, due to reduced production, as excavating from the Kijang mine is more challenging as it approaches the end of its mine life. In combination with the lower selling price, this resulted in lower bauxite revenues. The 2004 sales target for bauxite is 1.3 million wmt.
Revenues from Antam?s iron sands increased as sales volumes outpaced the increase of production and jumped 93% to 90,768 wmt, as Antam secured Chinese buyers and began to export iron sands for the first time. The iron sands mining unit had been seeking new buyers, as local demand from cement producers had dwindled. Iron sands production did not meet the quarterly target, while iron sands sales surpassed the quarterly target by 226%. The 2004 production and sales targets for iron sands are 190,000 wmt and 161,000 wmt respectively. (alex)
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