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Financial Review
Financial Review
Assets
Total Assets
On December 31, 2004 Antam’s total assets stood at
Rp6,043 billion (US$650m), at 40% increase over
2003. The Rp1,716 billion (US$185m) increase is
largely attributed to increased fixed assets due to further
construction of the FeNi III nickel smelter and new power
plant and higher commodity prices.
Current Assets
Antam’s current assets increased by 17% to Rp2,992
billion (US$322m) largely due to higher trade receivables,
inventories and prepaid taxes, which increased 233% to
Rp183 billion, due to value added tax. As well, prepaid
expenses increased 152% to Rp68 billion.
Cash and Cash Equivalents
Antam’s cash and cash equivalents stood roughly the same
at Rp1,999 billion (US$215m), a 4% increase over 2003
and accounted for 33% of total assets. The major sources
of the cash were long term debt and operations. The slight
increase is due to higher commodity prices, which offset
the significant capital expenditures for the full overhaul
of FeNi II, and the construction of FeNi III. Antam’s cash
levels, which were 96% US dollars, actually decreased by
Rp109 billion, but the weakening Rupiah had the effect of
increasing Antam’s cash levels in Rupiah terms.
A large portion of Antam’s cash, US$105 million or Rp976
billion, was held in US dollar time deposits with ABN AMRO
in Singapore, which rolled over on a weekly basis and paid
interest of 0.935% to 1.5%. These funds, acquired through
a Eurobond issued by Antam’s subsidiary AFL in 2003,
back the letter of credit issued to pay Mitsui and Kawasaki
for the construction of FeNi III smelter. Interest rate levels
on the US Dollar deposits decreased to a range of 0.61%
and 1.50%, while those on Rupiah deposits decreased to
a range of 5.0% and 7.24%. Antam had no short term
investments in 2004.
Trade Receivables
Unlike the decrease in 2003, Antam’s trade receivables
increased by 115% in 2004 to Rp282 billion or 10% of
total revenue. This is largely attributed to higher nickel
prices and all of the receivables are fully collectible. Like in
2003, the bulk of the receivables were denominated in US
dollars for nickel products.
Inventories
Antam’s inventories rose 19% to Rp396 billion, with nickel
ore, ferronickel and gold and silver all increasing to Rp134
billion, Rp59 billion and Rp46 billion respectively. Due to
higher sales revenues, Antam’s inventory turnover increased
to 7.2 times from 6.4 times, which is higher than Antam’s
standard two to three months of inventory on hand.
Non-Current Assets
Similar to 2003, Antam’s fixed assets grew 77% in 2004
to a net book value of Rp2,693 billion (US$290m), which
increased Antam’s non-current assets 71.5% to Rp3,050
billion (U$328m). The increase is due to the additional
Rp1,303 billion, attributed to the machinery and equipment
for the partly constructed FeNi III smelter and associated
power plant as well as the full overhaul of FeNi II smelter.
Included in this amount is the interest payment of Rp139
billion, associated with the funding for FeNi III, which is
capitalized to fixed assets during construction rather than
accounted for as an expense. The value of construction in
progress grew to Rp1,859 billion (US$200m).
Due to exploration spending at Tayan and development
spending at Buli, deferred exploration and development
expenditures rose 35% to Rp196 billion and is the second
largest non-current asset.
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