On August 22, 2024, PT Amman Mineral Internasional (AMMN) recorded a significant share transaction on the negotiated market of the Indonesia Stock Exchange (IDX) on Thursday, August 22, 2024, involving 26.38 million lots of AMMN shares worth Rp26.38 trillion (US$1.7 billion).
As of Friday, no official statement has been released regarding the AMMN share transaction on the IDX negotiated market.
In the regular market, Amman Mineral Internasional’s shares closed up 0.72 percent at Rp10,450 per share at the end of the first trading session on August 22, 2024. Year to date, AMMN shares have increased by 58.33 percent.
On the financial front, AMMN reported revenues of US$947 million in Q2 2024, up 57.4 percent quarter on quarter (qoq). This growth was driven by strong copper production of 236 million pounds (Mlbs), up 76 percent year on year (yoy), and gold production of 494 thousand ounces (Koz), which surged 189 percent yoy.
The increase in gold prices by 13 percent yoy and lower cash costs of US$2.44 per pound also improved AMMN’s profit margins. Farras Farhan, an analyst at Samuel Sekuritas Indonesia, mentioned in his research that AMMN’s margins improved overall.
Cumulatively, Amman Mineral recorded net sales of US$1.54 billion in the first half of 2024, up 167 percent compared to the same period last year. This increase was supported by the production of high-grade ore.
The company’s Earnings before interest, taxes, depreciation, and amortization (EBITDA) also jumped 186 percent with a margin of 62 percent, and net profit was recorded at US$479 million, up 291 percent compared to the previous year.
However, Farras Farhan cautions that the AMMN stock has risks related to debt. The company’s net debt reached US$2.4 billion, up 18 percent from the end of December 2023. This reflects a leverage ratio of 0.75 times and a net debt-to-EBITDA ratio of 2.55 times, indicating higher debt risk.
On the other hand, AMMN benefits from stable gold prices above US$2,300 per ounce and the planned start of cathode copper production in Q4 2024.
“We are more optimistic about earnings in the second half of 2024, also supported by management’s guidance on increasing copper production to 456 Mlbs and gold production to 1,009 Koz,” Farras said.
He, however, warned of potential threats ahead for AMMN asd the end of Phase 7 of the Batu Hijau mine project in Q1 2025 is expected to lead to a decline in production, which could negatively impact performance next year.
“The year-to-date (ytd) outperformance of AMMN shares could trigger profit-taking,” he said.
Samuel Sekuritas recommends holding AMMN shares with a target price of Rp12,000 per share. As of this report, AMMN shares are traded at Rp10,875.
Previously, AMMN President Director Alexander Ramlie stated that the company’s performance in the first half of 2024 had reached the highest level in the last seven years.
Since taking over the Batu Hijau mine, AMMN has managed to break several production records, achieving extremely high metal production levels, even surpassing the previous best performance in 2022.
