PT Vale reports higher production, revenue

IDX-listed integrated nickel mining firm PT Vale Indonesia Tbk said that nickel production in the second quarter of this year increased by16.74 percent to 20,107 metric tons from 17,224 tons in the first quarter.

The company also reported in a statement Thursday that revenue in the second quarter increased to US$148 million from $143.9 million, while average realized price fell to $7,540 per ton from $8,214 per ton.

?Nickel matte revenue was about 3 percent higher in 2Q17 than in 1Q17, despite a lower average realized price in 2Q17. More than ever, we realize the importance of remaining focused on improving efficiency and reducing costs,? said Nico Kanter, CEO and President Director of the company in the statement.

Elsewhere, the company said the cost of revenue per metric ton of nickel matte sold in 2Q17 is 2 percent lower than 1Q17, excluding the provision for decline in inventory value, which increased by $8.1 million compared to 1Q17. The decline in the cost of revenue per metric ton of nickel matte sold was driven mainly by reductions in supplies and employment costs of 11 percent and 17 percent respectively; while production increased.

Fuels and lubricant costs increased in the second quarter on both a per-unit-sold basis and in total amount. This was due to an increase in the fuel price, which was partially offset by an improved diesel consumption rate.

When compared to 1Q17, HSFO, diesel and coal consumption in 2Q17 increased by 22 percent, 8 percent and 4 percent respectively. This increase corresponded mainly to an increase in production. HSFO usage per metric ton of production in 2Q17 slightly increased by 4 percent, however, the usage per metric ton of production for diesel and coal actually decreased by 7 percent and 11 percent respectively.

PT Vale?s EBITDA in 2Q17 was $9.5 million, compared with $24.5 million in 1Q17, primarily due to a lower average realized price. Despite lower EBITDA, the company?s cash and cash equivalents increased to $260.7 million as of June 30, 2017, from $235.5 million on March 31, 2017. ?PT Vale will continue to exercise prudent control of its spending to preserve cash,? the company said.

PT Vale disbursed approximately $11.9 million in capital expenditures this quarter, down from $18.8 million in 1Q17.

In 2017, PT Vale said it plans to produce approximately 80,000 tons of nickel in matte.

	2Q17	1Q17	1H17	1H16
Nickel in matte production?	20,107	17,224	37,331	36,256
Nickel matte deliveries?	19,620	17,524	37,144	36,672
Average realized price?	7,540	8,214	7,858	6,731
EBITDA?	9.5	24.5	34.0	35.3
Revenue?	148.0	143.9	291.9	246.8
Loss?	(15.3)	(6.2)	(21.5)	(20.0)
Loss per share4	(0.0015)	(0.0006)	(0.0022)	(0.0020)
? metric ton (t) ? US$ per t ? US$ million 4 US$

Editing by Reiner Simanjuntak