Inco?s Q3 earnings drop on lower nickel price
Monday, October 27 2008 - 04:00 AM WIB
Net earnings for the third quarter of 2008 stood at US$73.5 million, or $0.007 per share, compared to $265.5 million, or $0.027 per share, for the third quarter 2007, the company said in a statement.
Sales revenues of $313.0 million in the quarter ended Sept. 30, 2008 compared to $561.6 million in the same quarter of 2007. Operating profit in the quarter reached $61.4 million, with an operating margin of 20 per cent. EBITDA totaled $75.6 million for the third quarter of 2008, compared to $399.9 million in the third quarter 2007.
Production of nickel in matte for the third quarter was almost 19,100 metric tons, similar to the corresponding period in 2007.
The company said it was continuing efforts to enhance production cost-structure by improving, among others, the condition of our mining road surfaces in order to extend the lifetime of vehicle tires and reduce diesel consumption for the mining fleet. ?We are also reducing high sulphur fuel oil (HSFO) consumption in our process plant?s reduction kiln through improved performance. In addition, we are replacing some of the older equipment in our mining fleet which will lead to higher overall equipment availability and reduce operating costs,? CEO Arif Siregar said.
In light of the current market and economic situation, the company?s board of commissioners, at their meeting on Oct. 24, 2008 held in Toronto, Canada, decided to defer dividend deliberations until consideration of a final dividend at the company?s annual shareholders meeting to be held in March 2009.
The board of commissioners also decided to approve the strategy proposed by the board of directors of shutting down all the thermal power generators, until their usage becomes profitable again. Consequently, the company will henceforth rely on its low-cost hydropower generation. It is anticipated that this decision will result in decreased annual production on a go-forward basis, perhaps by as much as 20 per cent.(denny)
Summary of results--all figures are in US$ except for nickel in matte production and deliveries which are in metric tons:
| Third Quarter | First Nine Months | |||
| 2008 | 2007 | 2008 | 2007 | |
| Nickel in matte production: | 19,078 | 19,069 | 56,227 | 58,119 |
| Nickel in matte deliveries: | 19,697 | 21,194 | 57,171 | 59,461 |
| Average realized price per metric ton | 15,888 | 26,500 | 19,803 | 31,874 |
| Net sales ? millions | 313.0 | 561.6 | 1,132.1 | 1,867.4 |
| Net earnings ? millions | 73.5 | 265.5 | 369.1 | 972.6 |
| Net earnings per share | 0.007 | 0.0271* | 0.037 | 0.0971* |
| Note: * Restated to reflect 10-for-1 stock split approved by shareholders on December 17, 2007 and effective on the Indonesia Stock Exchange on January 15, 2008 | ||||