Mar 1, 2012

Antam FY11 net profit increases 13.5%

The state-controlled nickel and gold miner PT Aneka Tambang Tbk (Antam) announced an unaudited consolidated net profit which increased 13.5% to Rp1.91 trillion for the full year of 2011, from the Rp1.68 trillion for the same period in 2010. 
The significant increase was mostly due to higher sales of ferronickel, nickel ore, and gold. Antam’s earnings per share in 2011 was Rp200.57 over Rp176.77 in 2010. 
“Our 2011 results reflect a significant production and sales increase due to higher sales of our main commodities. Last year also saw the commencement of our long term strategic initiative inline with the start of the construction of the US$450 million Tayan Chemical Grade Alumina project and
the US$1.6 billion East Halmahera Ferronickel Project," said Antam’s President Director Alwinsyah Lubis in a press statement last night.
In 2011, Antam’s unaudited sales recorded an increase of 18% compared to 2010 to Rp10.3 trillion, mainly due to an increase in the sales of ferronickel, nickel ore, and gold. Ferronickel was the largest contributor to Antam’s 2011 revenue, contributing 36% of the total revenue or an equivalent amount of Rp3.7 trillion.
2011 was record year for Antam’s ferronickel production and sales. Antam’s ferronickel production in 2011 reached 19,690 TNi, up 5% compared to 2010. In line with strong demand, the sales volume of ferronickel reached 19,527 TNi. Antam’s ferronickel revenue in 2011 increased 1% to Rp3.7 trillion compared to 2010 despite the 2011’s lower average selling price of the commodity by 3% of US$9.83 per pound.
Antam’s 2011 gold production volume reached 2,667 kg, which was comprised of Pongkor’s gold output of 1,987 kg and Cibaliung’s gold production volume of 680 kg. 
The gold production volume decreased 4% compared to the 2010 due to lower grades of the gold ores mined from Pongkor. As both Pongkor and Cibaliung mines are underground mines, the grades of gold ores extracted from these two mines are beyond the company’s control. 
Although Antam had a lower gold production, strong demand of gold boosted sales volume to 8,009 kg in 2011, an increase of 22% compared to 2010. 
With the increase in sales volume and average selling price of gold by 32% over 2010 to US$1,620.44 per toz, Antam’s 2011 revenue from gold reached Rp3.7 trillion, up
by 56% compared to 2010.
Antam’s gross profit in 2011 rose 3% over 2010 to Rp3 trillion inline with a 26% rise in cost of sales
to Rp7.32 trillion, which was largely due to significant increase of cost of precious metals purchases
inline with higher gold demand. 
Due to higher increase of cost of sales over Antam’s revenue, gross margin was lowered to 29% in 2011 over 34% in 2010.
Antam’s operating profit rose 1% to Rp1.99 trillion in 2011 over Rp1.97 trillion in 2010. Antam’s operating margin was lowered to 19% in 2011 over 22% in 2010.
Antam’s financial structure remains strong and solid. At the end of 2011, Antam had cash and cash equivalents of Rp5.6 trillion, a 33% increase over Rp4.2 trillion in 2010. 
Antam had Rp3 trillion of Rupiah denominated bonds which was issued at the end of 2011 to largely fund Antam’s ferronickel smelters modernisation and optimisation projects.

Disclosure: No position at the stock mentioned above. 

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