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The Downward Trend of Global Nickel Commodity Prices and Sharp Fluctuation of The US Dollar Exchange Currency Rate to Indonesian Rupiah Also Affecting Company’s Profitability in 1Q20
The Global Covid-19 Pandemic Has Led to Disruption in International Economic Trading Activity also Affected ANTAM’s Ferronickel Export Sales Performance During 1Q20
ANTAM’s Remains as One of the Lowest Cash Cost Global Ferronickel Producer with Ferronickel Cash Cost Level of USD3.35 per lb. During The First Five Month Period of 2020
Jakarta, June 27, 2020 - PT Aneka Tambang Tbk (ANTAM; IDX: ANTM; ASX: ATM) is pleased to announce that in the first quarter of 2020 (1Q20) the Company records the operating profit of Rp137.54 billion. In 1Q20, ANTAM’s net sales reached Rp5.20 trillion with contribution from export sales amounted to Rp1.37 trillion or 26% from total sales revenue. During 1Q20, gold became as the largest contributor of Company sales with the proportion of 76% or equal to Rp3.97 trillion. Meanwhile, ferronickel commodity was the second largest contributor, amounted to Rp965.95 billion or 19% of total net sales.
In midst of volatility condition of the downward trend of global nickel commodity price and the sharp fluctuation of the US Dollar exchange currency rate to Indonesian Rupiah also affected Company’s profitability during 1Q20. During 1Q20, the Company recorded loss on foreign exchange of Rp362 billion and booked loss of the period for 1Q20 of Rp281.84 billion. Nevertheless, the Company’s business and operation performance are remains solid. During the 1Q20, ANTAM’s recorded Earning Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of Rp34 billion. Moreover, ANTAM solid financial position are also reflected on the 2020 Company’s S&P Global corporate credit rating result that maintain on the rating of “B/outlook stable”.
During 1Q20, ANTAM maintains the production and sales of its main commodity on optimum level amidst the volatility condition on global mining industry and disruption on international trading activity due to global Covid-19 pandemic. ANTAM’s ferronickel production and sales achieves at 6,315 ton of nickel within ferronickel (TNi) and 6,379 TNi respectively. As for ANTAM’s gold commodity, in 1Q20 the gold production from Company’s internal mines reached 446 kg (14,339 troy oz.), meanwhile the total gold sales volume reached 5,097 kg (163,872 troy oz.).
ANTAM expects the production and sales of its main commodity will increase in the future in line with the improving of global economic condition and the demand recovery for mining commodities in the second quarter period of 2020. Based on the Competent Person Report as of December 31, 2019, ANTAM’s nickel resources amounted to 1.36 billion wet metric ton (wmt) and bauxite resources reached to 597 million wmt. ANTAM’s total resources of nickel and bauxite is able to support Company’s business development plan and sustain Company’s long term operation. As well, ANTAM’s vast nickel and bauxite deposit can meet demand from domestic third party smelters. In addition, the establishment of mineral domestic benchmarking prices by the Ministry of Energy and Mineral Resources will create a competitive atmosphere for domestic mineral price. Moreover it will bring a positive catalyst for ANTAM in terms to expand Company’s mineral customer based on domestic market especially for nickel ore commodities.
Furthermore, in line with the Company’s business development strategy through the development of mineral downstream initiative, ANTAM main project under development includes of The East Halmahera Ferronickel Plant Development Project with production capacity of 13,500 ton nickel within ferronickel in North Maluku. On bauxite commodity, ANTAM is currently focusing on the development of Smelter Grade Alumina Refinery (SGAR) plant in Mempawah, West Kalimantan with PT Indonesia Asahan Aluminium (Persero) with an estimated total production capacity of up to one million ton SGA per annum.
In ANTAM Consolidated Financial Statement for the year ended March 31, 2019, the Company set forth the restatements on the previous consolidated statement of equity accounting of investments in foreign operations, long-lived assets, capitalization of certain expenditures, inventories, provision for environmental and reclamation costs and certain taxation accounts. In addition, the reclassifications were also conducted on certain accounts to conform with the 2019 audited presentation.
In 2020, in terms to maintain Company’s positive achievement on operation and financial performance, ANTAM will be more focusing in develop the domestic market based customer especially on gold commodity in line with positive growth demand for Company’s gold product on domestic market.
Moreover in term to maintain ANTAM’s low cost position, the Company always promoting the efforts to reduce the operational cash costs through the various operation innovation and taking strategic policies to meet an appropriate and optimum cost efficiency strategy. This effort are also reflecting on ANTAM’s ferronickel unaudited cash cost figure the achieved at USD3.35 per lb. for the first five month period of 2020 and placed the Company as one of the lowest cash cost global ferronickel producer.