G-Resources Revenues Fall On Low Prices
Jakarta. G-Resources, a Hong Kong-based miner, saw its revenue from the Martabe mine in North Sumatra drop substantially in the first quarter of this year due to weaker gold and silver prices despite higher output.
G-Resources owns a 95 percent interest in the Martabe mine, which is managed under a sixth generation Contract of Works, which was signed in 1997 and will be valid until 2027. It requires higher royalty payments to the government than earlier-generation contracts.
The mine is located on the west coast of North Sumatra in Batangtoru sub-district.
Receipts from sales of gold and silver for the first three months fell 25 percent to $89.3 million in the January to March period this year, from $117.9 million a year earlier, the company said in a statement distributed in Jakarta on Wednesday.
In terms of volume, G-Resources sold 62,689 ounces of gold during the period, down from 67,898 ounces, and 450,592 ounces of silver, up from 227,402 ounces.
During the quarter, the average price of gold and silver dropped 21.6 percent and 33.3 percent, respectively.
G-Resources mined 64,802 ounces of gold and 515,618 ounces of silver, compared to last year?s 63,333 ounces of gold and 244,383 ounces of silver.
The company?s full-year production target was 230,000 to 250,000 ounces of gold and 2 million ounces of silver.
G-Resources remains upbeat on the operation of Martabe due to lower production costs.
?All-in sustaining costs under the World Gold Council guidelines were $682 per ounce for the quarter, a $75 an ounce reduction from the previous quarter [which] demonstrates Martabe?s position as one of the world?s leading gold mines,? the company said in a press statement.
Martabe is one of the most profitable mines in the world due to its low stripping ratio.
The ratio refers to the amount of materials extracted to find metals, and the high grade of ores. G-Resources, a Hong Kong based miner, has invested more than $900 million developing the Martabe mine.
Martabe started commercial operations early last year and the mine is designed to sustain gold production of 250,000 ounces and up to 3 million ounces of silver. It is estimated to hold reserves of 8.05 million ounces of gold and 77 million ounces of silver.
Martabe is responsible for a small chunk of Indonesia?s gold production, while the bulk comes from Freeport Indonesia?s Grasberg Mine and Newmont Nusa Tenggara?s Batu Hijau Mine.
BRI Q1 Profit Rises 18% on Loans
Jakarta. Bank Rakyat Indonesia, the country?s second-most valuable lender, posted a 18 percent rise in profit in this year?s first quarter on strong loan demand by the country?s consumers.
Net income at Bank Rakyat Indonesia or BRI, rose to Rp 5.9 trillion ($507.2 million) in the January to March period this year, compared to Rp 5.01 trillion in the same period last year.
Net interest income, or revenue from loans after deducting charges to depositors, rose 25 percent to Rp 12.08 trillion from Rp 9.65 trillon, while outstanding loans jumped 20 percent to Rp 432.44 trillion. Still, first quarter lending growth was slower than the 31 percent increase in the same period last year.
?There will be some monetary tightening this year,? Achmad Baiquni, BRI?s finance director, said on Wednesday.
?Bank Indonesia is trying to control lending growth at 15 percent to 17 percent. We need to keep ours in that range,? he added.
Bank Indonesia raised its benchmark rate by 1.75 percentage points in June last year to the current 7.5 percent in a move to curb excessive loan demand by the country?s consumers.
Economic growth in Indonesia is forecast to expand at the slowing pace of 5.5 percent in the first quarter this year, according to estimates by Bank Indonesia. The Central Statistics Agency (BPS) is expected to announced the country?s gross domestic product numbers on May 5.
Having posted lower lending growth under a higher key interest rate, BRI managed t o post a 9.06 percent net interest margin in the first quarter this year, an improvement from 8.19 percent in the same period last year.
Net interest margin, calculated in percentage points, is the difference between a bank?s lending rate and deposit rate.
According to BRI?s Baiquni, growth in the micro segment is relatively higher than that of total lending, which helped the net interest margin.
?Micro lending gives us a relatively higher yield,? he added.
Micro lending rose 21 percent in the first quarter, contributing 31 percent to BRI?s total lending in the first quarter.
BRI?s fee-based income rose 20 percent to Rp 1.2 trillion, 64 percent of which came from deposit administration fees.
Sofyan Basir, BRI?s president director, said the lender is taking part in the bidding process for Bank Mutiara, a troubled bank currently being auctioned by the government .
Earlier this year, BRI announced plans to set aside Rp 3 trillion for the acquisitions of a smaller bank, a brokerage house and a life insurer.
Demand for Retail Space in Jakarta Falls Amid Fears of Slow Spending
Jakarta. Demand for retail space in Jakarta declined drastically in this year?s first quarter, property firm Jones Lang LaSalle Indonesia reported, as retailers slowed expansions amid concerns of slowing consumption.
Anton Sitorus, Jones Lang LaSalle Indonesia?s (JLL) head of research, told reporters on Wednesday that the net take up of space in Jakarta?s shopping malls only reached 3,600 square meters in the first quarter this year.
The figure is 86 percent lower than the net take-up of 26,000 square meters retail space in the same quarter last year.
The occupancy rate, however, remained stable at 92 percent.
?We expected the retail sector to be the most stable among other property sectors, but it turns out the first quarter showed quite a drastic decline,? Anton said.
The head of research blamed the rupiah?s depreciation against the US dollar, which reached 26 percent last year, for having a lingering, cautionary effect on Indonesia?s retailers.
The currency traded at 11,590 against the greenback on Wednesday. It has gained 4.9 percent so far this year.
James Austin, JLL?s head of retail, said merchants are holding back on expansion plans, opting instead to optimize their existing stores.
?For the last five years, a retailer?s goal was to have as many stores as possible. In 2014 to 2015, they are taking stocks,? Austin said. ?The trend now is to look back at the stores they already have, refurbish them and making the most of their current business portfolio.?
A limited number of new indoor locations ? brought on by the Jakarta government?s new moratorium on the development of new shopping malls ? has also impacted demand.
The restriction is forcing developers to venture into Jakarta?s surrounding areas, such as Serpong and Bekasi. Meanwhile, larger retailers, like housewares giant Ikea, have fallen into the growing trend of opening stand-alone stores.
Demand for Jakarta office has also suffered, most prominently in the city?s business districts ? Sudirman, Thamrin and Kuningan ? where occupancy totaled 16,000 square meters in the first quarter of 2014, compared to 120,000 square meters in the same period last year.
Still, this year?s first quarter figures represent 13 percent of the total take-up of office space in the central business district in 2013, where the occupancy rate remained stable at 94 percent.
?Occupancy rate in Jakarta?s CBD surpassed 90 percent in only the past two years. We expect it to improve after the presidential election [on July 9],? Anton said.
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Why is Kick Butts Day important? We couldn’t say it better than these supporters, whose messages were amplified in newspapers, on TV and in blogs.
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