Jakarta. Two state-controlled miners posted positive profit growth last year on the back of improved commodity prices, giving hope for a more optimistic view on the industry this year.
Tin miner Timah, the largest state-owned tin producer, saw its net income grow by 10 percent last year, while coal producer Bukit Asam’s profit rebounded to 9 percent growth.
Net income at tin miner Timah reached Rp 638 billion ($49 million) in 2014 from Rp 580.5 billion in the year before, as revenue growth rebounded, according to the company’s financial report listed on the local stock exchange on Wednesday.
Revenue at the Bangka-based company grew 26 percent to Rp 7.4 trillion last year, rebounding from 20 percent decline it witnessed in 2013.
Investors reacted positively to the full-year results. Shares in Timah rose by 1.5 percent to Rp 1,005 on the Indonesia Stock Exchange (IDX) on Wednesday, despite a 0.5 percent decline in the main stock index.
Timah said last month that it suspended all new sales until benchmark prices of the solder material rise above at least $20,000 per metric ton.
Still, the company would honor long-term contracts and aims for sales this year of between 27,000 and 30,000 tons.
Tin traded for $17,801 per ton on the London Metal Exchange this week, the lowest level since October 2012. The commodity price has weakened in the past two years partly due to worries over ample supply and weak Chinese economic growth. Indonesia, second largest tin producer after China, had failed in its several attempts to clog supplies and prop up prices.
Meanwhile, coal miner Bukit Asam also reported solid net income growth in 2014 as the company managed to sell its coal at a higher price, after profits declined by nearly 40 percent in 2013.
The listed company’s profit rose nine percent to Rp 2.02 trillion, compared to Rp 1.85 trillion posted a year before, according to the company’s official statement.
Revenue climbed to Rp 13.08 trillion, up 17 percent from Rp 11.21 trillion in 2013, thanks to a 15 percent increase in average selling price of coal to Rp 723,635 per metric ton.
Bukit Asam’s production and sales in 2014 rose to 18.2 million tons, or 10 percent from last year’s 17.8 million tons.
Still, the positive performance was unable to lift the company’s shares on Wednesday as it fell 2.04 percent to Rp 10,800.
Guntur Hariyanto, an analyst at state credit ratings agency Pefindo, noted that Bukit Asam’s profit largely grew on the back of steady domestic demand last year.
“Bukit Asam was able to navigate through the decline in coal prices last year because of it’s supplying to the domestic market. On top of that, the company was quite responsive in increasing it’s operational efficiency,” he told the Jakarta Globe on Wednesday.
He maintains a relatively positive outlook on firms which cater to the domestic market, such as Bukit Asam, while he’s more reluctant for miners that heavily depend on commodity exports.
“It’s still hard for them as prices are unlikely to rebound to where they were before,” he added.