Danareksa Equity Snapshot – ANTM, 03 Desember 2018
Stefanus Darmagiri | Analyst |
Aneka Tambang (ANTM) reported net profits of IDR287bn in 3Q18 (+190.2% qoq, +74.1% yoy). This translated into net profits of IDR631bn in 9M18 versus a net loss of IDR331bn in 9M17. The 9M18 net profits were mainly attributable to strong sales volume of ferronickel, nickel ore and gold as well as the solid nickel price. The results are better than our expectation and consensus forecasts. Given the correction in the nickel price, we expect lower quarterly net profits in 4Q18. We are reviewing our recommendation and target price.
3Q18: Better nickel ore and gold sales volume. Net profits jumped by 190.2% qoq to IDR287bn in 3Q18 driven by: a) strong nickel ore sales volume (+184.0% qoq) and b) better gold sales volume (+26.6% qoq). Although the company’s ferronickel and gold ASP declined, the weakening of the rupiah relative to the US dollar helped to improve the quarterly net profits. With the correction in the nickel price in 4Q18, we expect the company to book lower quarterly net profits in 4Q18.
9M18: Turnaround into profits. The company reported net profits of IDR631bn in 9M18 vs. a net loss of IDR331bn in 9M17. This turnaround is mainly attributable to: a) higher ferronickel sales volume (+49.4% yoy) as well as higher ASP, b) greater nickel ore sales volume (+99.3% yoy) in 9M18 and c) greater gold sales volume (+221.4% yoy). As a result of higher nickel ASP, the company experienced better gross and operating margins.
The operation of Ferronickel Haltim to boost ferronickel production in 2019. Ferronickel production is expected to increase further to around 28,000 – 30,000 tonnes in 2019 (2018F: 24,600 tonnes) driven by the operation of the Ferronickel Haltim Project (P3FH) in 2H19. The company is expected to complete the construction of P3FH by the end of this year and continue with the commissioning in 2H18. In the first stage, P3FH will have nameplate capacity of 13,500 tonnes per annum, giving the company annual ferronickel capacity of 40,500 tonnes. Following the operation of P3FH, we expect ANTM to receive an additional quota for low-grade nickel ore for 2019. In 2018, the company obtained an export quota of 3.9mn wmt.
Under Review. Despite the recent correction in the nickel price as a result of the trade wars between the USA and China, the company’s ability to improve ferronickel sales volume following the commercial operation of P3FH is expected to enhance the net profits in 2019. We are reviewing our recommendation and target price.