But IndonesiaÆs Antam did just that on Monday. For several years, FinanceAsia has been following the start-and-go expansion efforts of Antam and in the first quarter these efforts finally paid off. A new smelter added to operations over the last quarter, during a time when its core commodity is fetching higher-than-usual prices, gave it a winning combination.
ôWe are delighted with our first quarter results. We are creating huge profits from these unprecedented high nickel prices," says president director Dedi Aditya Sumanagara. "However, we recognise the increase is also due to the commercial operations of our new ferronickel smelter, FeNi III, which boosted nickel output by 61% to 4,353 tonnes. The timing of our expansion couldnÆt have been better. WeÆre going to concentrate on cost reduction and growth investment and look forward to a fantastic 2007.ö
AntamÆs net sales increased 324% to $260 million, more revenue than Antam has ever made in a single quarter before, and more than the annual revenues Antam earned prior to 2003. The surge in revenues is largely due to increased ferronickel and nickel ore sales volumes and prices.
Ferronickel earned an additional Rp866 billion, or 440%, resulting in Rp1,063 billion in revenues. Nickel ore contributed an additional Rp860 billion, or 355% increase, resulting in Rp1,102 billion in revenues. Meanwhile, gold sales increased 110% to Rp143 billion, while sales of silver, the by-product of gold production, rose 150% to Rp20 billion.
As a result, nickel ore and ferronickel contributed 46% and 45% of first quarter revenues, with gold, bauxite ore and silver contributing 6%, 2% and 1% respectively.
AntamÆs operating expenses increased 109% to Rp77 billion, representing a small segment of AntamÆs overall costs. The main reasons for the increase were the 56% increase in general and administration expenses to Rp53 billion and due to the exploration expense increasing from Rp0.2 billion to Rp21 billion. With a comparatively smaller increase of operating expenses, AntamÆs operating income surged almost 10 times, or 863%, to Rp1,424 billion, resulting in a wider operating margin of 60% compared to 26%.
It also announced first quarter earnings per share of Rp562.62.