Timah's Q1 net profit nearly triples

Leony Aurora, The Jakarta Post, Jakarta

Riding on higher global tin prices and a weaker rupiah against the dollar, state-owned PT Timah almost triples its unaudited net profit for the first three months of the year to Rp 57.4 billion (US$6 million).

Timah, the world's largest integrated tin miner, booked a net profit of Rp 114 per share in the first quarter of 2005, a jump from Rp 41 per share recorded in the same period the previous year, which equaled Rp 20.5 billion in total for all shares, the company said in a statement.

Tin was traded at $8,356 per metric ton in the three months ending March 31, a 25.6 percent rise from $6,651 per metric ton last year.

The Bangka-based company also benefited from the continuing downward trend of the rupiah against the dollar -- the currency that it uses to conduct most transactions. The rupiah weakened against the greenback on average by 9.7 percent in Timah's transactions in 2005's first quarter to Rp 9,272 a dollar from Rp 8,451 in the corresponding period the year earlier.

Although tin sales volume rose by only 11 percent to 9,184 metric tons in the period, revenues from the metal were boosted by 62.5 percent to Rp 711.5 billion.

The company also sold Rp 50.4 billion of coal and acquired Rp 4.1 billion from its services.

The firm has forecast that tin prices in the international market would increase by 16 percent this year, triggered by the European Union and Japan's decision to ban the use of lead for solders starting next year on environmental concern.

Solders are expected to account for about 60 percent of global tin demand this year, with the remaining from food-can makers.

Timah targets to produce 40,000 tons of tin this year from its mines, which are located, among others, in Bangka and Karimun, off the coast of Sumatra.

In the first three months of this year, the company produced 9,206 metric tons of tin, some 47 percent more than the 6,246 of output in the same period in 2004.