By ITRI

ScrapMonster Contributor

SEATTLE (ITRI.CO.UK):  The Indonesian state tin company, PT Timah, reported a 148% increase in profits to Rp 251.97 billion (~US$18.9 million) in 2016, despite a fall in mine and refined tin production to 24,121 and 23,756 tonnes respectively, according to an official press release by the company.

While tin-in-concentrate and refined tin output both fell compared to 2015, the company had a particularly strong final quarter, with a 19% QOQ increase in mine output to 8,142 tonnes and a 20% increase in refined tin output to 7,761 tonnes. Offshore production fell 8.6% to 16,996 tonnes in 2016, or 70% of total mine output while inland production fell 8.2% to 7,125 tonnes of tin-in-concentrate compared to the previous year.

The company's revenues increased by 1.4% year-on-year to Rp 6.97 trillion (~US$520 million) in 2016 while the cost of revenues declined by 5.1%. At 26,677 tonnes, sales of refined tin were greater than refined production but still down 11.3% compared to 2015. This is explained by a 33% run-down in refined tin stocks to 3,435 tonnes at the end of the year, while stocks of tin contained in ore and slags fell 3.7% to 10,657 tonnes.

In a statement announcing the results, the company stated that the positive financial results were "due to appropriate business strategy amid the volatility in commodity markets, as well as the operational strategy in acquisition of tin ore with competitive cost."

The company has set a production and sales target of 30,000 tonnes of refined tin in 2017 and plans to allocate Rp2.65 trillion (~US$ 200 million) in capital expenditure to help it achieve that goal by increasing both mining and smelting capacity.

ITRI View: The improved tin price in Q4 enabled PT Timah to increase its purchase price for tin ore from domestic partners, boosting its overall production in the final quarter. While the large capital investment planned should help support PT Timah's own production on a longer-term basis, we believe that the targeted improvement in output this year will be largely offset by lower refined tin production from private smelters in the country, due to the competition for purchased ore.

Courtesy: www. itri.co.uk