- Chinese firms plan to spend $8.6 billion on Indonesia smelters
- Maxis Q2 earnings at RM464m after writing off RM125m assets
- Naim Holdings Q2 earnings jump 63% to RM31m
Posted: 30 Aug 2012 04:30 AM PDT
JAKARTA: Chinese firms plan to invest $8.6 billion on aluminum and iron smelter projects in Indonesia, the industry minister said on Thursday, in a bid to guarantee supplies of metals under threat from a ban on exports of mineral ores from 2014.
Indonesia, a major supplier of metal ores to top consumer China, is trying to drive investment in the metal processing sector by imposing a 20 percent tax on raw ore exports ahead of an outright ban.
China is the largest consumer and producer of aluminum and Indonesia supplied almost 80 percent of the 25 million tonnes of bauxite it bought in the first half of the year. However, imports from Indonesia slumped in June in July, after the tax was imposed.
The planned investment appears to be the biggest to date by Chinese firms in Indonesia's metal processing sector, and if realized, would a success for the government's policy.
"The projects are forward moves in the metal refining industry in Indonesia," Industry Minister Mohamad Hidayat said after a signing ceremony attended by representatives of the three Chinese firms.
Hidayat named the companies as Beijing Shuang Zhong Li Investment Management Co, Ltd, Oriental Mining and Minerals Resources Co Ltd. and Rui Tong Investment Co Ltd.
Oriental Mining is an established steel producer but Chinese industry sources said they were not familiar with the other two companies.
Hidayat said Shuang Zhong Li planned to invest $7.1 billion to build an alumina refinery with a total production capacity of 1.8 million tonnes per year and an aluminum smelter with a total production capacity of 600,000 tonnes of aluminum ingot per year and a 1,250 MW power plant in West Kalimantan or Riau.
The other two firms plan to invest $1.5 billion on a direct reduced iron (DRI) plant with a total production capacity of 6 million tonnes per year in West Java, Hidayat added.
Both projects are to be carried out in stages, with the first completed by 2015 and the last by 2020.
Under the new Indonesian regulations, firms now have to submit plans to either build smelters or to process their ore locally, before being allowed to export raw ore from Indonesia.
Analysts said the decision to build smelters in Indonesia made sense for Chinese metal producers.
"Effectively they are losing a source of bauxite imports so you can replace it either by importing alumina from Australia, boosting bauxite imports from Guinea, or you can look at building some refineries in Indonesia," said Ivan Szpakowski, a metals analyst at Credit Suisse.
Chinese imports of bauxite from Indonesia fell 93 percent in July, while imports from Australia doubled, Chinese trade data shows. Chinese imports of iron ore in July fell 68 percent from Indonesia, and more than doubled from countries such as Chile, Mongolia and New Zealand.
Heng Kun, a senior analyst at China-based brokerage Essence Securities and who has been following the aluminum sector for years, expects more Chinese alumina producers to build smelters in Indonesia.
But like other analysts, Heng was cautious about the scale of these investments, especially in the current economic climate and as China's own growth slows.
"They have agreed the investment for now," he said, referring to the recent projects. "But how much the Chinese investor will put into these projects is hard to predict. They can say that they are having problems and cut the investment."
Earlier this month, industry sources said three of China's biggest alumina producers were planning to invest into bauxite mines and refineries in Indonesia.
One of these firms, Bosai Minerals Group Co Ltd, said on Thursday it had shortlisted an Indonesian partner for a $1 billion alumina plant on Bintan island which it expects to start production of 2 million tonnes per year by the start of 2015.
"We do not rule out building a smelting facility in Indonesia in the future. This alumina plant is the first step," said a Bosai Minerals spokesman.
The Indonesian Chamber of Commerce has said the country needs around 30 smelters to process various metals as part of a government drive to turn the country from an exporter of raw commodities into a manufacturing nation. - Reuters
Posted: 30 Aug 2012 03:55 AM PDT
KUALA LUMPUR: Maxis Bhd reported earnings of RM464mil in the second quarter ended June 30, 2012 compared with RM551mil a year after it wrote off certain network assets of RM125mil.
It said on Thursday that revenue rose 2.7% to RM2.216bil from RM2.158bil due to its mobile services. Earnings per share were 6.20 sen compared with 7.3 sen. It rewarded shareholders with a second interim single-tier tax-exempt dividend of 8.0 sen per ordinary share.
For the first half, its earnings were RM1.036bil compared with RM1.090bil. Revenue was 3.5% higher at RM4.445bil compared with RM4.291bil.
Maxis said for the first half ended June 30, 2012, the group recorded a 4% or RM154 million increase in revenues over the preceding year mainly contributed by the higher revenue from mobile services segment.
Group EBITDA grew 2% or RM43mil on the back of higher revenue offset by higher direct expenses. Hence, margin dipped 0.8 percentage point ending the period at 50.4%.
"Despite recording a higher EBITDA, the profit for the period decreased 5% or RM53mil," it said.
Maxis said the factors were by an asset write-off of certain network assets amounting to RM125mil; increase in net financing costs largely due to the additional borrowings secured early this year as the group moves towards a more optimal capital structure.
Other factors were higher amortisation of devices as more smart devices were made available in the market; and offset by the lower taxation of RM48mil.
Maxis said the mobile services recorded a 3% or RM111mil increase in revenues compared to a year ago, mainly due to higher mobile internet usage and sale of devices coupled with higher wireless broadband revenues.
Total non-voice revenue as a percentage of total mobile revenue stood at 45.3%, an increase of 2.9%.
Mobile segment EBITDA increased 2% or RM51 million on the back of higher revenue offset by higher direct and operating expenses. The resultant margin was lower by 0.2 percentage point to 52.4%.
Its enterprise fixed services rose 4% or RM4mil as higher revenues were driven by new activations of services.
Revenues in international gateway services increased by 35% or RM27mil driven by higher hubbing activities. Despite higher revenues, EBITDA fell RM5mil due to higher direct expenses.
Its home services revenues grew RM12mil, mainly due to the home wireless Internet. However, home services EBITDA fell 48% or RM14mil on-year mainly due to higher sales and marketing and start-up expenses to drive home fibre Internet services.
Posted: 30 Aug 2012 03:13 AM PDT
KUALA LUMPUR: Naim Holdings Bhd's earnings rose 63% to RM31.24mil in the second quarter ended June 30, 2012 from RM19.16mil a year ago, boosted by its property and construction divisions.
It said on Thursday its revenue increased by 16.5% to RM120.59mil from RM103.49mil. Earnings per share were 13.19 sen compared with 8.09 sen. It declared an interim dividend of 6.0 sen a share.
For the first half ended June 30, its earnings increased by 50.7% to RM47.32mil from RM31.39mil in the previous corresponding period.
Naim Holdings attributed it to an improvement in margin for the construction segment, especially from the substantially completed projects and also improvement in performance of associates and joint ventures.
Revenue declined by 4.3% to RM214.74mil from RM224.39mil due to lower construction revenue.
"When comparing to the immediate preceding quarter of 2012, group revenue increased from RM94.1mil to RM120.6mil. The group profit before tax improved by 60% from RM23.0mil to RM36.7mil.
"The increase was mainly attributable to the property and construction divisions, which recorded higher revenue and profit in the current quarter under review," it said.
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