Profit Of PAM Mineral Drops 78.92 Percent To IDR 12.2 Billion In The First Quarter Of 2024

Rupiah (Photo: Antara)

JAKARTA - nickel producer issuer PT PAM Mineral Tbk (NICL) recorded a net profit of IDR 12.2 billion in the first quarter of 2024. This achievement decreased by 78.92 percent compared to the same period the previous year which was recorded at IDR 56 billion.

"The decline was due to the approval of the RKAB subsidiary (IBM), which was only approved at the end of February, so that the total sales recorded in the first quarter of 2024 were only sales during March," said NICL President Director Rudy Tjanaka quoting Antara.

In terms of financial performance, the company recorded sales of IDR 116.7 billion, down 54.98 percent compared to the same period in 2023 of IDR 259.4 billion.

Rudy assessed that this decline was due to a decrease in the volume of nickel production because the company's RKAB (NICL) only published in May 2024, but the company succeeded in efficiency in the cost of revenue by increasing the gross profit margin in the first quarter of 2024 to 37.07 percent from 36.92 percent in the first quarter of 2023.

Along with the decline in sales, the company's operating profit also decreased, which was recorded at IDR 19.5 billion or a decrease of 74.85 percent compared to the previous period of IDR 77.8 billion. So, in terms of net profit, the company only recorded a profit in the first quarter of 2024 of IDR 12.2 billion.

Rudy explained that the company's declining financial performance was still understandable due to various factors. In the first quarter of 2024, there was oversupply pressure on nickel commodities that occurred in Indonesia caused a significant decline in prices.

Based on data from the Directorate General of Mineral and Coal at the Ministry of Energy and Mineral Resources, nickel reference prices from September 2023 to March 2024 have decreased by 23.08 percent. This has a negative impact on nickel mining issuers in Indonesia, including NICK.

Then, in terms of balance sheet, the company recorded total assets in the first quarter of 2024 amounting to Rp881.7 billion, a significant growth compared to total assets in the first quarter of 2023, which amounted to Rp692.1 billion.

On the other hand, the total debt in the first quarter of 2024 was recorded at IDR 123.9 billion or did not change significantly from the previous period of IDR 119.9 billion.

Furthermore, Rudy explained that in the second quarter of 2024 the current geopolitical situation developed, including the widespread US and UK sanctions against Russia against exports of raw materials and the ban on sales at the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME).

In addition, the incident in New Caledonia that affected the operations of nickel mining companies was disruption of mining production activities and several nickel mining in Australia experiencing supply disruptions due to cost factors.

As a result of some of these sentiments, the world's supply of nickel ore, especially in New Caledonia and Australia, is abnormal, which is expected to be a positive catalyst for price increases in the nickel industry chain going forward.

This is reflected in the increase in nickel reference prices at the end of April 2024 which has increased 8.76 percent to 17.424.52 US dollars/dmt compared to the March 2024 period which is at the level of 16.021.67 US dollars/dmt.

The company believes that with some positive sentiment, and the approval of RKAB for 2024, the company will boost production and sales which will then have a positive impact on the company's financial performance.

In the second semester of 2024, Rudy revealed NICKL's plan to produce according to RKAB capacity.

"The company considers that with the disruption of the production process above, which limits the supply of nickel at the end of the first quarter of 2024 until the beginning of the second quarter of 2024, with the addition of production capacity and issuance of RKAB, it is hoped that it can increase the sustainable selling price, which will then increase the company's average price (ASP)," said Rudy.

NICL targets sales achievement by the end of 2024 of IDR 1.289 trillion with a pre-tax profit target of IDR 352 billion. The company believes that with a conducive industrial business climate, the company can achieve the financial performance target above.