- Production Rose To 169.2 Million Pounds And Earnings More Than Doubled To US$1,173 Million
(All amounts are expressed in US$ and all per share figures reflect the 10-for-1 stock split
JAKARTA, February 29th 2008 (ANTARA) - PT International Nickel Indonesia Tbk ("PT Inco" or the "Company", ISX: INCO) today announced its unaudited results for 2007. Net earnings more than doubled to US$1,173.0 million (US$0.12 per share) from US$513..4 million (US$0.05 per share) in 2006. Sales rose 74 percent to US$2,325.9 million in 2007 from US$1,337.7 million in the prior year. Despite an 11 day strike in November 2007, the Company had record production of nickel in matte in 2007 of 76,748 metric tons (169.2 million pounds) compared to 71,622 metric tons (157.9 million pounds) inthe previous year.
"Our annual production of 76,748 metric tons (169.2 million pounds) of nickel in matte was the highest in PT Inco's production history and above our 2007 plan of 74,843 metric tons (165 million pounds)." Said Arif Siregar, the Company's President Director. "The Company achieved this outstanding result despite an employee strike for which we suffered an estimated production loss of approximately 2,300 metric tons (five million pounds). We were able to the furnaces and improved production efficiencies."
The Company's realized price for nickel in matte averaged US$23,816 per metric ton (US$10.80 per pound) in the fourth quarter 0f 2007, a 4 percent decrease from US$24,725 per metric ton (US$11,21 per pound) in the same period of the prior year. In 2007, the Company's realized price for nickel in matte averaged US$29,881 per metric ton (US$13,55 per pound), up 63 percent from US$8.33 per pound) in 2006.
Cash provided by operating activities but before capital expenditures was US$1,401.0 million in 2007 compared with US$500.7 million in 2006. The increase in 2007 was mainly due to a US$1,299.2 million increase in cash receipts from customers and a US$70.6 million increase of other receipts, which more than offset an increase of US$369.2 million in corporate income tax and a US$37.7 million rise in employment costs due to higher profit sharing from the 2006 level. Net cash putflow after capital expenditures, debt servicing and dividend payments was US$183.6 million in 2007, compared to an inflow of US$228.7 million in 2006.
Unit cash cost of production for 2007 rose to US$7,845 per metric ton (US$3.56 per pound) from US$6,902 per metric ton (US$3.13 per pound) in the prior year. In 2007 we used 2.77 million barrels of High Sulphur Fuel Oil (HSFO) at an average cost of US$56.91 per barrel, an increase from 2006 usage of 2.75 million barrels at an average cost of US$52.00 per barrel. Due to a greater usage of diesel generators purchased in the first half 2007 to support production and conserve water, PT Inco consumed 145,486 kilolitres of diesel fuel at an average cost of US$0.60 per litre, up from 100,669 kilolitres at US$0.57 per litre in 2006.
"Our primary business strategy includes optimizing production while minimizing costs, to benefit from the current strong nickel price environment. PT Inco targeting output at a range of 77,000-to-79,000 metric tons (169.8-to-174.2 million pounds) of nickel in matte in 2008, subject to adequate rainfall to fill our reservoirs during the remainder of the year." added Mr. Siregar.
"We continue to work toward our goal of building new dam and hydroelectric facility at Karebbe on the Larona River, which we expect will raise PT Inco's generating capacity to 365 megawatts - a 90 megawatt increases - while reducing our energy supply risk and lowering our unit cash cost for nickel in matte production. We expect to complete the Karebbe project in the first half of 2011 and are in the process of finalizing capital cost estimates. In addition, as part of our initiatives to sustain profitability, PT Inco has completed a study related to converting the ore dryers from expensive high sulphur fuel oil (HSFO) to pulverized coal to further reduce operating cash costs. It will also provide the Company with the flexibility to switch between HSFO and coal, depending on the market conditions. Projected capital costs for this conversion are estimated to be US$100 million with completion targeted for 2010," continued Mr. Siregar.
Net earnings were US$200.5 million in qurter ended December 31, 2007, or US$0.02 per share, down 24 percent from net earnings of US$265.5 million, or US$0.03 per share in the same quarter of 2006. Sales in the fourth quarter 2007 decreased by 22 percent to US$458.5 million from US$589.6 million in the same period of the prior year due to lower realized prices and lower deliveries. Fourth quarter production was 18.597 metric tons (41.0 million pounds) compared to 21,228 metric tons (46.8 million pounds) in the corresponding period in 2006 due to the strike.
Unit cash cost of production in the fourth quarter of 2007 rose 21 percent to US$8,774 per metric ton (US$3.98 per pound) from US$7,241 per metric ton (US$3.28 per pound) in the same quarter of 2006. This increase was primarily due to higher fuel cost, higher employee profit sharing and increased services and contracts. PT Inco's average HSFO price was US$68.00 per barrel in the fourth quarter 2007 compared to US$51.74 in the same quarter of 2006. The Company booked an average diesel price of US$0.68 per litre in the fourth quarter 2007 compared to US$0.61 per litre in the previous year period.
Cash provided by operating activities but before capital expenditures was US$179.7 million in the fourth quarter 2007 compared with US$332.4 million in corresponding period in 2006. The decrease was mainly due to an increase of US$116.3 million in corporate income tax. Net cash outflow after capital expenditures, debt servicing and dividend payments was US$824.4 million fourth quarter 2007compared to an inflow of US$278.6 million fourth quarter 2006.
Cash capital spending fell slightly to US$102 million in 2007 from US$110 million in 2006. Major items included sustaining capital; spending related to our major capital programs to raise production capacity to 90,718 metric tones (200 million pounds) of nickel in matte; environment, health and safety; and cost-saving initiatives. Delays in the resolution of a permit from the Minister of Forestry for construction of our Karebbe hydroelectricity generating facility resulted in realized capital expenditure of US$13 million for this project in 2007, compared to our 2007 expected capital expenditure of US$36 million.
PT. Inco plans capital spending of US$212 million, including: growth capital projects of US$64 million, sustaining capital expenditures of US$77 million, and US$42 million for environment, health and safety.
In 2007 we achieved key milestones in our commitment to excellence in environment, health and safety performance. We completed the final stage of our US$62 million capital project to bring all our electric furnaces well within government mandated dust emissions levels. Installation of the last combustion and pollution control equipment on three electric furnaces was completed on schedule and under budget in 2007. Capital spending for this equipment in 2007 amounted to US$17 million.
The Company's results are summarized below (Unaudited):
(All amounts are expressed in US$ and all per share figures reflect the 10-for-1 stock split
JAKARTA, February 29th 2008 (ANTARA) - PT International Nickel Indonesia Tbk ("PT Inco" or the "Company", ISX: INCO) today announced its unaudited results for 2007. Net earnings more than doubled to US$1,173.0 million (US$0.12 per share) from US$513..4 million (US$0.05 per share) in 2006. Sales rose 74 percent to US$2,325.9 million in 2007 from US$1,337.7 million in the prior year. Despite an 11 day strike in November 2007, the Company had record production of nickel in matte in 2007 of 76,748 metric tons (169.2 million pounds) compared to 71,622 metric tons (157.9 million pounds) inthe previous year.
"Our annual production of 76,748 metric tons (169.2 million pounds) of nickel in matte was the highest in PT Inco's production history and above our 2007 plan of 74,843 metric tons (165 million pounds)." Said Arif Siregar, the Company's President Director. "The Company achieved this outstanding result despite an employee strike for which we suffered an estimated production loss of approximately 2,300 metric tons (five million pounds). We were able to the furnaces and improved production efficiencies."
The Company's realized price for nickel in matte averaged US$23,816 per metric ton (US$10.80 per pound) in the fourth quarter 0f 2007, a 4 percent decrease from US$24,725 per metric ton (US$11,21 per pound) in the same period of the prior year. In 2007, the Company's realized price for nickel in matte averaged US$29,881 per metric ton (US$13,55 per pound), up 63 percent from US$8.33 per pound) in 2006.
Cash provided by operating activities but before capital expenditures was US$1,401.0 million in 2007 compared with US$500.7 million in 2006. The increase in 2007 was mainly due to a US$1,299.2 million increase in cash receipts from customers and a US$70.6 million increase of other receipts, which more than offset an increase of US$369.2 million in corporate income tax and a US$37.7 million rise in employment costs due to higher profit sharing from the 2006 level. Net cash putflow after capital expenditures, debt servicing and dividend payments was US$183.6 million in 2007, compared to an inflow of US$228.7 million in 2006.
Unit cash cost of production for 2007 rose to US$7,845 per metric ton (US$3.56 per pound) from US$6,902 per metric ton (US$3.13 per pound) in the prior year. In 2007 we used 2.77 million barrels of High Sulphur Fuel Oil (HSFO) at an average cost of US$56.91 per barrel, an increase from 2006 usage of 2.75 million barrels at an average cost of US$52.00 per barrel. Due to a greater usage of diesel generators purchased in the first half 2007 to support production and conserve water, PT Inco consumed 145,486 kilolitres of diesel fuel at an average cost of US$0.60 per litre, up from 100,669 kilolitres at US$0.57 per litre in 2006.
"Our primary business strategy includes optimizing production while minimizing costs, to benefit from the current strong nickel price environment. PT Inco targeting output at a range of 77,000-to-79,000 metric tons (169.8-to-174.2 million pounds) of nickel in matte in 2008, subject to adequate rainfall to fill our reservoirs during the remainder of the year." added Mr. Siregar.
"We continue to work toward our goal of building new dam and hydroelectric facility at Karebbe on the Larona River, which we expect will raise PT Inco's generating capacity to 365 megawatts - a 90 megawatt increases - while reducing our energy supply risk and lowering our unit cash cost for nickel in matte production. We expect to complete the Karebbe project in the first half of 2011 and are in the process of finalizing capital cost estimates. In addition, as part of our initiatives to sustain profitability, PT Inco has completed a study related to converting the ore dryers from expensive high sulphur fuel oil (HSFO) to pulverized coal to further reduce operating cash costs. It will also provide the Company with the flexibility to switch between HSFO and coal, depending on the market conditions. Projected capital costs for this conversion are estimated to be US$100 million with completion targeted for 2010," continued Mr. Siregar.
Net earnings were US$200.5 million in qurter ended December 31, 2007, or US$0.02 per share, down 24 percent from net earnings of US$265.5 million, or US$0.03 per share in the same quarter of 2006. Sales in the fourth quarter 2007 decreased by 22 percent to US$458.5 million from US$589.6 million in the same period of the prior year due to lower realized prices and lower deliveries. Fourth quarter production was 18.597 metric tons (41.0 million pounds) compared to 21,228 metric tons (46.8 million pounds) in the corresponding period in 2006 due to the strike.
Unit cash cost of production in the fourth quarter of 2007 rose 21 percent to US$8,774 per metric ton (US$3.98 per pound) from US$7,241 per metric ton (US$3.28 per pound) in the same quarter of 2006. This increase was primarily due to higher fuel cost, higher employee profit sharing and increased services and contracts. PT Inco's average HSFO price was US$68.00 per barrel in the fourth quarter 2007 compared to US$51.74 in the same quarter of 2006. The Company booked an average diesel price of US$0.68 per litre in the fourth quarter 2007 compared to US$0.61 per litre in the previous year period.
Cash provided by operating activities but before capital expenditures was US$179.7 million in the fourth quarter 2007 compared with US$332.4 million in corresponding period in 2006. The decrease was mainly due to an increase of US$116.3 million in corporate income tax. Net cash outflow after capital expenditures, debt servicing and dividend payments was US$824.4 million fourth quarter 2007compared to an inflow of US$278.6 million fourth quarter 2006.
Cash capital spending fell slightly to US$102 million in 2007 from US$110 million in 2006. Major items included sustaining capital; spending related to our major capital programs to raise production capacity to 90,718 metric tones (200 million pounds) of nickel in matte; environment, health and safety; and cost-saving initiatives. Delays in the resolution of a permit from the Minister of Forestry for construction of our Karebbe hydroelectricity generating facility resulted in realized capital expenditure of US$13 million for this project in 2007, compared to our 2007 expected capital expenditure of US$36 million.
PT. Inco plans capital spending of US$212 million, including: growth capital projects of US$64 million, sustaining capital expenditures of US$77 million, and US$42 million for environment, health and safety.
In 2007 we achieved key milestones in our commitment to excellence in environment, health and safety performance. We completed the final stage of our US$62 million capital project to bring all our electric furnaces well within government mandated dust emissions levels. Installation of the last combustion and pollution control equipment on three electric furnaces was completed on schedule and under budget in 2007. Capital spending for this equipment in 2007 amounted to US$17 million.
The Company's results are summarized below (Unaudited):
| Fourth Quarter | Year | |||
| 2007 | 2006 | 2007 | 2006 | |
| Nickel in matte production: | ||||
| - thousand metric tons | 18.6 | 21.2 | 76.7 | 71.6 |
| - millions pounds | 41.0 | 46.8 | 169.2 | 157.9 |
| Nickel in matte deliveries: | ||||
| - thousand metric tons | 19.0 | 23.5 | 76.6 | 71.7 |
| - million pounds | 41.8 | 51.7 | 169.0 | 158.1 |
| Average realized price: | ||||
| - per metric ton | US$23,816 | US$24,725 | US$29,881 | US$18,356 |
| - per pound | US$10.80 | US$11.21 | US$13.55 | US$8.33 |
| Net sales - millions | US$ 458.5 | US$ 589.6 | US$2,325.9 | US$1,337.7 |
| Net earnings - millions | US$ 200.5 | US$ 265.5 | US$1,173.0 | US$ 513.4 |
| Net earnings per share | US$ 0.02 | US$ 0.03 | US$ 0.12 | US$ 0.05 |
Under the Company's long-term U.S. dollar-denominated sales contracts, the selling price of its nickel in matte is the greater of Vale Inco Limited's net average realized price for nickel or the value determined by a formula based on the London Metal Exchange cash price for nickel.
At December 31, 2007, the Company's inventories of nickel in matte were 747 metric tons (1.6 million pounds), compared with 1,132 metric tons (2.5 million pounds) at September 30, 2007 and 668 metric tons (1.5 million pounds) at December 31, 2006. Variations in inventories are largely due to shipment scheduling.
For further information, please contact:
Indra Ginting, Director of Investor Relations & Corporate Secretary gintiin@inco.com
Claudio Bastos, Vice President, Chief Financial Officer cbastos@inco.com
or: www.pt-inco.co.id
COPYRIGHT © 2008 - ANTARANEWS
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