Tambang Timah reports 11.8% profit increase

Tambang Timah reports 11.8% profit increase

JAKARTA (JP): PT Tambang Timah, a publicly-listed tin mining
company, yesterday reported an 11.8 percent increase in its net
profit to Rp 134.5 billion (US$58.14 million) last year due
mainly to a significant increase in prices.

"The realized tin prices averaged $6,199 per ton last year,
as compared to $5,413 in 1994," the company's president, Erry
Riyana Hardjapamekas, told a press conference yesterday.

Erry said that last year's tin prices were at their lowest
level, $5,300 per ton, in February and hit a peak of $7,280 in
August, when some major tin producers reduced their export
volumes.

He said that besides a sustained recovery in tin prices, a
decline in production costs from $4,311 per ton in 1994 to $4,210
last year was another supportive factor of the profit increase.

"We were able to book the profit jump despite the decline of
our sales volume from 37,130 tons in 1994 to 36,040 tons last
year," he said.

"We decided to reduce our production to maintain our stocks at
a reasonable level," he added.

The company's sales revenue increased by 15 percent to Rp
502.2 billion last year.

Erry declined to explain the company's projection of sales
volume or profit for this year but said that tin prices would
remain stable.

He also said that the company will try to maintain its 20
percent share of the world's tin market in the short term.

In the medium to longer term, it will diversify its asset base
and sources of revenues by seeking other mining opportunities in
Indonesia and other Asian countries.

"We want to be a diversified mining company by the year 2000,
producing tin, gold and coal. And we are now looking for mining
opportunities in Sumatra, Kalimantan and Irian Jaya as well as
other countries like Myanmar," he said.

He said that Tambang Timah has now been granted rights for
gold exploration over an area of 41,618 hectares in Natal, North
Sumatra and has commenced preliminary surveys in three areas in
Kalimantan for the same purpose.

Erry said that the diversification program will be financed by
the company's cash surplus, which now accounts for approximately
Rp 100 billion.

"We believe that with a strong balance sheet, a healthy cash
flow and experienced staff, we will be able to achieve our aim of
becoming a diversified mining company," he noted.

Moreover, according to Erry, a healthy cash flow will also
allow the company to get bank loans of up to Rp 500 billion.

He said that the company will raise its tin production from
37,416 tons last year to 41,500 tons this year. By 1999, the
production will likely reach 50,000 tons.

The company's exploration director, Mulyadi Nitiwisastro, said
that Tambang Timah's tin mining rights cover an area of 780,000
hectares in South Sumatra.

"Approximately 80 percent of the area has yet to be explored,"
Mulyadi said. (08)