Lower prices, export ban cut Antam?s Q1 net sales by 34%

By Romel S. Gurky

IDX-listed mining company PT Antam Tbk said unaudited net sales in the first quarter of this year dropped by 34 percent to Rp 2.22 trillion compared to the same period of last year due to lower prices of gold and ferronickel as well as the export ban on mineral ores including nickel introduced by the government earlier in the year.

?Gold sales made up the largest share of the first quarter 2014 unaudited revenue figure with a 52 percent contribution or equivalent to Rp1.16 trillion,? the company said in a quarterly report released Wednesday.

Gold
The company said in the report that production volume of gold in the first quarter of 2014 (1Q14) amounted to 513 kg (16,493 oz), a 16 percent decline compared to the first quarter of 2013 (1Q13). The decrease was mainly attributable to the lower gold grade of the ore mined from the Pongkor and Cibaliung mines.

Meanwhile, the 1Q14 gold sales volume reached 2,323 kg (74,686 oz) or a 20 percent decrease compared to 1Q13 following lower gold production.

The decline in the sales volume of gold in 1Q14 coupled with lower gold average selling price of US$ 1,318.31 per oz caused a 26 percent decline in the unaudited gold revenue to Rp1.16 trillion.

Ferronickel
The production volume of ferronickel in lQ14 declined by 32 percent to 3393 tons of nickel contained in ferronickel (TNi) as Antam conducted the optimization of the blending of ore feed for the ferronickel processing.

Antam, however, said it remains confident that it will reach its 2014 production target of 18,000 TNi.

The sales volume of ferronickel in 1Q14 was recorded at 5,523 TNi, 46 percent higher than 1Q13 due to Antam's strategy to maximize ferronickel sales.

Despite a 21 percent decline in the ferronickel average selling price to US$6.2 per pound, Antam said its first quarter ferronickel unaudited net sales grew by 50 percent to Rp891 billion compared to same period of last year due to the increase in the sales volume.

Nickel Ore
In line with the implementation of the government's mineral ore export ban in 2014, Antam's nickel ore production will largely be used to feed the company's ferronickel smelters, the report said.

?Having said that, Antam conducted nickel ore shipment prior to the start of the ban on January 12, 2014,? it said.

Antam's 1Q14 nickel ore production showed a 95 percent decline to 178,459 wmt, which was entirely consisted of high grade nickel ore sourced from the nickel mine in Pakal Island.

In line with the ore export ban, sales of nickel ore in 1Q14 amounted to 2 15,400 wmt or 92 percent lower than 1Q13.

With the decrease in the sales volume of the commodity, Antam's unaudited revenue from the sales of nickel ore was recorded at Rp87billion, 92 percent lower than the same period in 2013.

?Antam had anticipated the ore export ban policies by implementing the strategy to increase the sales volume of ferronickel, gold and coal as well as to intensify its efficiency measures,? the company said in the report.

Bauxite
Elsewhere, the company said that to prepare for the commercial operation of its Tayan CGA plant, Antam increased by 186 percent its 1Q14 bauxite production to 115,340 wmt, compared to same period in 2013. In 1Q14 Antam did not conduct bauxite export.

Production Volume

Commodity	Unit	1Q13 (Jan-Mar) 2013	1Q14 (Jan-Mar) 2014
Ferronickel	TNi	5,007	3,393
High-Grade Nickel Ore	Wmt	2,025,241	178,459
Low-Grade Nickel Ore	Wmt	1,238,606	-
Total Nickel Ore	Wmt	3,263,847	178,459
Gold	Kg/Toz	608/19,548	513/16,493
Silver	Kg/Toz	3,087/99,249	3,853/123,877
Bauxite	Wmt	40,323	115,340

Sales Volume

Commodity	Unit	1Q13 (Jan-Mar) 2013	1Q14 (Jan-Mar) 2014
Ferronickel	TNi	3,784	5,523
High-Grade Nickel Ore	Wmt	1,086,300	104,350
Low-Grade Nickel Ore	Wmt	1,554,307	111,050
Total Nickel Ore	Wmt	2,640,607	215,400
Gold	Kg/Toz	2,909/93,527	2,323/74,686
Silver	Kg/Toz	3,652/117,415	3,901/125,420
Bauxite	Wmt	26,111	-

Editing by Reiner Simanjuntak