PT Inco?s Q3 net profit up on higher sales price

IDX-listed nickel miner PT International Nickel Indonesia Tbk's (PT Inco) unaudited net profit reached US$75.9 million in the third quarter of the year, higher compared to the previous quarter's $17.4 million due to an increase in the average realized price of nickel in matte.

The nine-month net profit however dropped to $110.46 million from $369.12 in the same period of last year, the company said on Thursday.

Sales were $249.8 million for the three months ended on September 30, 2009, an increase of 61.2 percent from $155.0 million in the second quarter of 2009. The nine-month sales however dropped by 53.52 percent to $526.19 million from $1.13 billion.

Production of nickel in matte in the third quarter 2009 was 17,800 metric tons compared to 16,300 metric tons in the second quarter of 2009.

?In addition to higher production and higher prices as major drivers to better earnings (in the third quarter), PT Inco also achieved a structural operating cost reduction that improved its cost of production per unit. For instance, we reduced the fixed cost and improved our overall productivity,? said Arif Siregar, the company?s President Director.

Arif also said the construction of a third hydroelectric generating facility at the Karebbe site at a cost of $410 million is underway with overall progress of 36 percent year to date. All fabrication packages are progressing as planned. The Karebbe project is expected to be fully completed in the first half of 2011.

The project will produce enough power to replace all the existing oil and diesel generators now feeding the electric furnaces at the Sorowako facility. It is part of PT Inco?s energy cost reduction program. (denny)