Antam's profit up 102% on higher sales, prices

Rendi A. Witular, The Jakarta Post, Jakarta

State-owned PT Aneka Tambang (Antam), one of the world's largest nickel and gold miners, announced on Friday that its net profit in the first semester increased twofold on higher sales volume and prices of its main commodities.

Antam's corporate secretary Dohar Siregar told The Jakarta Post that the increase in profit was mostly attributed to higher volume and prices of ferronickel and gold, Antam's two most important commodities.

Antam recorded a net profit of Rp 107.5 billion (US$12.6 million) or Rp 56.47 per share, up from Rp 53.3 billion or Rp 43.38 per share. Its sales also increased by 21 percent to Rp 916 billion from Rp 707 billion.

The company sold 4,612 tons of ferronickel during the first half, up by 24 percent from 3,712 tons in the same period last year. The price of ferronickel during the period also surged by 27 percent to $3.73 per pound from $2.9.

Antam's sales of gold also increased by 40 percent to 2,083 kilograms from 1,487. The price of gold during the period also jumped by 15 percent to $348.73 per troy ounce from $302.59 a year ago.

The company, however, announced that its sales of nickel ore declined to 1.52 million wet metric tons from 1.62 million, but it still managed to gain a profit as the price of the high concentrated ore soared by 57 percent to $26.31 per wet metric ton from $16.8.

Elsewhere, in a statement to the Jakarta Stock Exchange, Antam announced that it had signed an engineering, procurement and construction contract with Japan-based Mitsui Co. and Kawasaki Heavy Industry Ltd. in which the latter will take part in the construction of Antam's third ferronickel plant, called FeNi III.

With the new facility Antam is expected be able to double its production of ferronickel to 26,000 tons per year. The project is also aimed at maintaining the company's competitive advantage as the world's lowest-cost nickel producer.

The project, which is scheduled to be completed in 2005, is expected to cost Antam around $380 million.

Beside nickel and gold, Antam also produces industrial materials, bauxite, iron sand and silver. Its exploration area covers a total of 2.7 million hectares.

The government still owned 65 percent shares in the publicly- listed company, while the remaining 35 percent is owned by the public.