PT Inco Q1 net earnings drops sharply

South Sulawesi based nickel miner PT International Nickel Indonesia Tbk (PT Inco) on Thursday announced unaudited net earnings of US$1.6 million for the first quarter of 2002, or one cent per share, compared with $8.9 million, or four cents per share, for the first quarter of 2001.

The Company's realized price for nickel in matte averaged $4,409 per tonne ($2.00 per pound) in the first quarter of 2002, compared with $5,449 per tonne ($2.47 per pound) in the corresponding 2001 period and $3,928 per tonne ($1.78 per pound) in the 2001 fourth quarter.

Commenting on the first quarter 2002 results, Edward W. Hodkin, President and Chief Executive Officer, said: "We are encouraged by the strong nickel price improvement from the fourth quarter 2001 and by above average first quarter rainfall, which is critical to enhancing production and reducing costs. These factors can significantly impact our business results, ? said Edward W. Hodkin, President and Chief Executive Officer.

"With lake water levels near capacity and another three months remaining in the traditional rainy season, we expect to conserve cash by maximizing low- cost hydroelectric power generation to our operations," Hodkin added. "We are emphasizing all aspects of prudent cash management in order to meet our debt service commitments in the current uncertain global economic and political environment."

Production of nickel in matte for the first quarter of 2002 was 15,700 tonnes (34.7 million pounds), compared with 15,200 tonnes (33.6 million pounds) for the corresponding 2001 period. First quarter 2002 unit cash costs of $1.27 per pound of nickel in matte were one cent higher than in the same period last year, reflecting accelerated overburden stripping to expose more high-grade ore.

"As a result of this effort, furnace feed nickel levels rose to planned levels during the first quarter," said . Hodkin. "We continue to target an increase in ore grade to 1.73 percent nickel in 2002 from 1.69 percent last year. Furthermore, we are on target to produce 130 million pounds of nickel in 2002." The annual production rate reflects a fourth quarter 2002 furnace rebuild, which should be completed in the first quarter of 2003.

PT. Inco, which is listed in JSX, is a subsidiary of Canadian nickel miner INCO Limited. (alex)