PT Inco reports lower Q1 sales, net profit

Publicly-listed nickel company PT. International Nickel Indonesia Tbk's (Inco) unaudited net profit reached US$139.6 million for the first quarter of 2008, down from $227.8 million in the same quarter last year.

Inco said in its quarterly report on Friday that its sales reached $380 million in the first quarter 2008, lower compared to $446.7 million in the corresponding period of 2007. Lower sales revenue was primarily due to a lower average realized price for nickel in matte, it said.

Despite lower net profit and sales revenue, Inco?s production of nickel in matte in the quarter was 20,136 metric tons, higher compared to 17,980 metric tons in the same period last year.

?We achieved higher output than at the same time last year, of the increase approximately 1,200 metric tons was due to deferring our planned shutdown for electric furnace maintenance to April 2008 and the balance due to better operations,? Inco?s president director Arif Siregar said.

Inco?s realized price for nickel in matte averaged $21,187 per metric ton in the first quarter of 2008, compared to $29,149 per metric ton in the corresponding period of 2007 and $23,816 per metric ton in the fourth quarter of 2007.

According to the company, unit cash cost of production in the first quarter of 2008 rose 20 percent to $8,857 per metric ton. This increase was primarily due to the higher price of high sulphur fuel oil (HSFO) and the higher price and usage of diesel. These increases were partially offset by lower employee costs. (denny)