PT Inco Tbk. reports sharp Q3 earnings decline
Thursday, October 25 2001 - 03:54 PM WIB
Net earnings for the first nine months of 2001 were $17.3 million, or seven cents per share, compared with $63.6 million, or 26 cents per share, in the corresponding period of 2000.
?Production in the third quarter continued to increase as we near full plant capacity. The production rate was achieved despite nickel ore grades being below plan. However, despite this encouraging performance, the weakening global economy resulted in further softening nickel demand and weaker nickel prices in the third quarter,? Rumengan Musu, President and Chief Executive Officer, said: ``
?Inco?s earnings in the third quarter of 2001 reflected a significant decline in the Company's realized nickel price, which was 26 per cent lower than the third quarter of last year. We also made our fourth scheduled payment of $38.5 million on our outstanding long-term debt plus interest of $11.3 million on September 30. Our strategy to conserve cash during these softer nickel market conditions and to service our debt will continue. ''
The Company's realized price for nickel in matte averaged $4,733 per tonne ($2.15 per pound) in the third quarter of 2001, compared with $6,384 per tonne ($2.90 per pound) in the third quarter of 2000.
Production of nickel in matte for the third quarter of 2001 was 16,200 tonnes (35.8 million pounds), compared with 16,000 tonnes (35.2 million pounds) in the corresponding 2000 period. Nickel unit cash cost of sales were $2,870 per tonne ($1.30 per pound) in the third quarter of 2001, compared with $2,725 per tonne ($1.24 per pound) in the corresponding 2000 period, reflecting increased spending to improve ore recoveries.
Cash provided by the Company's operating activities, but before capital expenditures, was $118.6 million in the first nine months of 2001, including $31.1 million in the third quarter, compared with $155.5 million in the first nine months of 2000.
Capital expenditures for the first nine months of 2001 were $13.4 million, down from $15.0 million in the corresponding 2000 period. After financing debt repayments and capital expenditures, cash flow was $0.3 million in the first nine months of 2001.
Inco operates a nickel mine in Soroako, South Sulawesi.(alex)