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)