Vale Indonesia reports lower revenue, higher earnings
Tuesday, May 5 2015 - 04:24 AM WIB
IDX-listed integrated nickel mining firm PT Vale Indonesia Tbk reported slightly lower revenue in the first quarter of this year (1Q15) due to lower output.
The company said a statement last week revealing unaudited first quarter results that earnings, however, increased by 39.4 percent in the first three months of this year compared to the corresponding period of last year thanks to a 7 percent increase in average selling price, and lower costs. Earnings sharply dropped when compared to the result in the fourth quarter of last year due to lower selling price and output.
PT Vale said that nickel in matte production declined by 10.8 percent to 17,476 metric tons in the March quarter of this year compared to the same period of last year as the company conducted maintenance program.
PT Vale said that despite the lower production in the first quarter, the company still maintains its full-year production target of 80,000 tons.
At the same time PT Vale sad it continued to control its costs prudently. The cost of revenue for 1Q15 was 14 percent lower than the cost of revenue incurred in the previous quarter, in line with the sales volume decrease. Lower fuel, lubricants and supplies lead to that favorable cost of revenue decline. This reflects cost discipline and operating productivity at PT Vale.
PT Vale?s High Sulphur Fuel Oil (HSFO) and diesel fuel consumption in 1Q15, 4Q14, 1Q14 and 2014 are captured in the table below:
| ? | Q115 | 4Q14 | 1Q14 | 2014 |
| HSFO volume (barrels) | 375,102 | 412,418 | 432,937 | 1,644,260 |
| HSFO average price per barrel | US$69.92 | US$94.01 | US$99.77 | US$98.45 |
| Diesel volume (kilo litres) | 17,296 | 16,189 | 15,510 | 63,344 |
| Diesel average price per litre | US$0.63 | US$0.87 | US$0.88 | US$0.89 |
The table shows that PT Vale benefited from lower HSFO price in 1Q15, which is significantly cheaper than in 2014.
In addition to controlling costs, in anticipating unfavorable nickel price environment PT Vale shall manage its cash flows cautiously. The company?s cash and cash equivalent as of March 31, 2015 and December 31, 2014 were US$328.2 million and US$302.3 million respectively while disbursed approximately US$30.2 million in capital expenditures in 1Q15.
In 2015 the company said it will maintain its focus on improving costs to sustain competitiveness in the long run without compromising the company?s foremost value: Life Matters Most. The company added it will also continue to leverage its enhanced smelting capacity and process optimization.
| ? | 1Q15 | 4Q14 | 1Q14 |
| Nickel in matte production1 | 17,476 | 20,586 | 19,604 |
| Nickel matte deliveries1 | 18,040 | 20,611 | 19,423 |
| Average realized price per metric ton2 | 11,745 | 12,895 | 10,972 |
| EBITDA3 | 71.4 | 91.3 | 49.3 |
| Revenue3 | 211.9 | 265.8 | 213.1 |
| Earnings3 | 25.1 | 41.9 | 18.0 |
| Earnings per share2 | 0.0025 | 0.0042 | 0.0018 |
| 1metric ton (t), 2US$,3US$ million | |||
Editing by Reiner Simanjuntak