Timah rakes in windfall profit from rupiah's fall

JAKARTA (JP): Publicly listed tin mining company PT Timah booked a profit of Rp 125.7 billion (US$15.7 million) in the first quarter of this year, up 375 percent from Rp 26.5 billion in the same period last year despite a fall in sales.

"The windfall profit was mainly caused by the dollar's sharp appreciation against the rupiah," company president Erry Riyana Hardjapamekas told reporters after the company's shareholders meeting.

Timah, the world largest tin mining company, is a major dollar-earner as it exports 96 percent of its products and its domestic sales are also in dollars.

Erry said the tin sales volume dropped by 5.8 percent to 8.966 metric tons in the first quarter of the year.

World tin prices averaged US$5.323 per metric ton in the first quarter of the year, a 10.7 percent decrease from last year's first quarter price of $5,960 per metric ton, he said.

"The drop in price was compensated by the dollar's appreciation against the rupiah," Erry said.

He said Timah recorded an increase in net profit of 13.54 percent to Rp 177.8 billion in 1997, compared to the 1996 net profit of Rp 156.6 billion.

Tin sales volume amounted to 43,490 metric tons in 1997, a 5 percent increase on 1996 sales of 41,400 metric tons.

World tin prices decreased to an average $5,687 per metric ton last year, compared to $6,211 per metric ton in 1996.

Erry said company shareholders meeting agreed to distribute Rp 71,098 billion, or Rp 141 per share, of the company's net 1997 profit in dividends.

The dividend for 1997 increased by 52 percent on the 1996 dividend, he said.

Erry said Timah planned to increase its output by 100 metric tons to 42,720 metric tons this year.

Timah, listed on the Jakarta and London Stock Exchanges, produces 20 percent of the world's tin from mines in Bangka, Belitung, Karimun and Kundur Islands in southern Sumatra.

Erry also said the shareholders meeting accepted the company's proposal to restructure its corporate organization by establishing three new subsidiaries -- PT Tambang Timah, PT Timah Rekayasa Mandiri, PT Eksplorasi Mineral Indonesia -- wholly owned by PT Timah.

Tambang Timah will operate tin mining and other industrial mineral businesses covering exploration, mining, smelting and refining, transportation and sales of its products.

Timah Rekayasa Mandiri will operate engineering, maintenance, fabrication and manufacturing businesses.

Eksplorasi Mineral Indonesia will operate research, consulting and services for the mineral exploration business.

"PT Timah will maintain its role as the holding company to control the operation and determine the strategy of the group as a whole," Erry said, adding PT Timah would transfer its operations and assets to the three subsidiaries.

The corporate reorganization is aimed at making Timah more efficient, competitive and able to accommodate its expansion plan.

Timah has several other subsidiaries, including tin mining company PT Koba Tin, a joint venture with Kajuara Mining Corporation of Australia and gold mining company PT Kutaraja Tembaga Raya, a joint venture with Phelps Dodge Australasia Inc of Australia. Timah has a 25 percent stake in both companies.

Timah also has a 71.8 percent stake in port and shipping company PT Dok & Perkapalan Air Kantung, and wholly owns two marketing arms, Idometal London and Indometal New York. (jsk)