Inco Limited reports its highest annual earnings since 1990
PT Inco expects to produce 140 million pounds of nickel in 2001
Thursday, February 8 2001 - 04:30 AM WIB
Canadian nickel miner Inco reported earnings for the quarter ended Dec. 31 were $78 million, or 38 cents a share fully diluted, compared with $40 million, or 18 cents a share, for the same quarter in 1999.
Analysts polled by First Call/Thomson Financial on average estimated Inco would earn 37 cents a share in the quarter.
Earnings for the year 2000 were near 1990 record levels.
The company earned $400 million or $1.97 a share fully diluted in 2000, vs. $12 million or a loss of 8 cents a share, after preferred dividends, in 1999.
The 2000 results include an unusual deferred tax benefit of $38 million from the second quarter. Inco's total debt was down to $1.03 billion at Dec. 31, 2000 from $1.344 billion in 1999.
Nickel output was 54,723 tonnes in the fourth quarter, vs. 42,081 in the year-earlier period. Total nickel production for 2000 was 202,806 tonnes compared with 177,253 tonnes in 1999.
Nickel cash costs were $1.24 a pound in the quarter, compared with $1.20 a pound in the year-ago quarter.
Hand indicated his management style would be similar to Sopko's but he was aiming for more growth especially in Asia, a natural outlet for the company's laterite projects at PT Inco in Indonesia and the new Goro project in New Caledonia.
``I really want to implement profitable growth. We have these fantastic ore bodies and what we need to do now is take them from where they are today, give them growth from 450 million pounds to 650 million pounds (of nickel), and really grow this company,'' he told Reuters.
He said the company had 266 million tonnes of minable resource at Goro, including an initial mining zone with 47 million tonnes of proven and probable reserves.
Initial estimates are to produce about 54,000 tonnes of nickel and 5.400 tonnes of cobalt at Goro a year, Hand said, adding that Goro's cash cost of production will be less than $1 a pound, after by-product credits.
He said PT Inco was expected to produce about 140 million pounds of nickel in 2001.
Hand told Reuters Inco would resume negotiations shortly on developing the massive nickel deposit at Voisey's Bay, located in Canada's Atlantic province of Newfoundland.
The deposit has a sulphide resource now estimated at 141 million tonnes, with proven and probable nickel grades of 2.83 percent.
The company, which bought Voisey's Bay in 1996, has been unable to develop it because of differences with the provincial government over the site of a billion-dollar smelter.
Inco is more optimistic about developing the deposit after the election last weekend of Roger Grimes, a former provincial mining minister, as the province's new premier.
Hand, a chief negotiator on Voisey's Bay, said he had not contacted Grimes since his election, but was looking forward to talks resuming on Voisey's Bay shortly.
Inco has forecast nickel production for the first quarter in 2001 will be 110 million pounds. For the year, production is seen at 460 million pounds, up from 447 million pounds of nickel in 2000. Nickel cash costs of sales after by-product credits will be $1.25 to $1.30 a pound in the first quarter.
Capital expenditures in 2001 are estimated to be about $300 million, compared to $227 million in 2000. With the decline in long-term debt levels in 2000, interest expense is projected to be about $70 million in 2001, compared with $83 million in 2000. (*)