Timah's profit up 190% due to rupiah plunge

JAKARTA (JP): Publicly listed PT Tambang Timah announced more than a 190 percent increase in consolidated net profit to Rp 518.18 billion (US$61 million) in 1998 from Rp 177.8 billion in the previous year.

The company attributed the surge in returns to the sharp depreciation of the rupiah against the U.S. dollar.

Gross profit rose by 361 percent to Rp 1.36 trillion from Rp 295.2 billion in the previous year. Operating profit increased by 461 percent to Rp 1.01 trillion from Rp 196.8 billion.

PT Tambang Timah, one of the world's major tin mining companies, operates 33 large-scale inland mines on Bangka island, South Sumatra. It also operates seven fixed furnaces and five crystallizers to process the tin ore.

The company's tin metal production rose last year by 1.87 percent to 43,418 tons from 42,620 tons.

Revenue generated by sales increased by 194 percent from Rp 691.6 billion in 1997 to Rp 2.03 trillion last year.

The company's tin business yielded the most profit accounting for 99.3 percent of total sales during the year. The remainder came from PT Dok & Perkapalan Air Kantung docking and boat services company and electrical and workshop services.

The improved figure was primarily a result of a strengthening U.S. dollar. The rupiah -- was Rp 2,500 to the U.S. dollar before the Asian monetary turmoil hit Indonesia in August, 1997 -- reached a low of 17,000 against the dollar in early 1998 as the crisis bit deeper into the economy. The rupiah managed to stabilize in the range of Rp 7,500 to Rp 8,000 a few months before the close of the year but recently fell to over Rp 8,500.

The company said that average realized prices for tin during 1998 were 2.6 percent lower than those of 1997 of $5,687 per ton to $5,541 per ton.

The average exchange rate realized by the company in 1998 was 225 percent higher than the rate of Rp 2,781 in 1997 to Rp 9,046 per U.S. dollar. (hen)