Vale net profit jumps by 345%
Friday, February 27 2015 - 12:57 AM WIB
IDX-listed nickel mining firm PT Vale Indonesia Tbk saw its audited net profit soared by more than 345 percent to US$172.3 million in 2014 from $38.7 million in the previous year.
PT Vale said in a statement Thursday that it recorded the highest annual production volume in its history in 2014, successfully executing its strategy to lower unit cost of revenue and benefiting from an improved realized price over 2013.
?The year 2014 was an important one for PT Vale on many fronts,? said Nico Kanter, CEO and President Director of the company, in the statement.
?In 2014 we successfully concluded our Contract of Work renegotiation with the government of Indonesia, we improved efficiencies and effectively restructured our production costs to the point that we are now are less susceptible to global oil prices. Each of these alone, and certainly all of these together, have enhanced our competitive position as we look to grow the business going forward,? he added.
PT Vale?s nickel in matte production increased by 4 percent in 2014 over production in 2013, attributable in large part to higher average electric power from our hydroelectric generating facilities and improved operation of the electric furnaces. On a quarter over quarter basis, nickel in matte production increased 7 percent in the fourth quarter 2014 (4014) over 3Q14.
Sales volume in 2014 increased by 3 percent compared to 2013 and by 4 percent quarter over quarter (4Q14 vs 30 14). The company said it also realized a 9 percent higher average selling price in 2014 over 2013, resulting in 13 percent higher revenues for the year.
The company said cost of revenue declined 6 percent in 2014 over 2013, driven predominantly by lower fuel, lubricant and employment costs. This reflects continuous improvement in cost discipline and operating productivity and highlights the success of the company?s cost reduction strategy a major component of which is the coal conversion phase 1 project (CCP1), which replaces high sulphur fuel oil (HSFO) with coal in the ore dryers.
PT Vale?s HSFO and diesel fuel consumption in 4Q14, 3Q14, 2014 and 2013 are captured in the table below:
| ? | 4Q14 | 3Q14 | 2014 | 2013 |
| HSFO volume (barrels) | 412,418?? | 393,669 | 1,644,260 | 2,331,063 |
| HSFO average price per barrel | US$94.01 | US$100.22 | US$98.45 | US$100.79 |
| Diesel volume (kilo litres) | 16,189 | 15,302 | 63,344 | 59,224 |
| Diesel average price per litre | US$0.87?? | US$0.92 | US$0.89 | US$0.87 |
The table shows a trend of decreasing fuel consumption achieved through the CCP1 project, and through improved fuel-efficiency in the reduction kilns, a direct result of the Company?s operational improvement program.
Elsewhere, the company said cash and cash equivalent as of December 31, 2014 and September 30, 2014 were $302.3 million and $372.4 million respectively. During the year, the company disbursed approximately $76.8 million in capital expenditures.
In 2015, PT Vale plans to maximize its capacity and produce approximately 80,000 metric tons (t) of nickel in matte. At the same time, the company will maintain its focus on improving costs to sustain competitiveness in the long run.
The company added it will also continue to leverage its enhanced smelting capacity and process optimization.
PT Vale said it is on track to execute its strategy to ensure long-term profitable growth by improving efficiency and cost competitiveness, and maximizing production through operational excellence. ?The amendment of the Contract of Work in October provides greater certainty for the company?s long-term future, and paves the way for the development and advancement of our growth programs,? it ended.
| ? | 4Q14 | 3Q14 | 20141 | 20131 |
| Nickel in matte production2 | 20,586?? | 19,313 | 78,726 | 75,802 |
| Nickel matte deliveries2 | 20,611 | 19,830 | 79,477 | 77,198 |
| Average realized price per metric ton3 | 12,895 | 14,616 | ?13,061 | 11,939 |
| EBITDA4 | 91.3 | 124.4 | 371.8 | 203.4 |
| Revenue4 | 265.8 | 289.8 | 1,038.1 | 921.6 |
| Earnings4 | 41.9 | 62.4 | 172.3 | 38.7 |
| Earnings per share3 | 0.0042 | 0.0063 | 0.0173 | 0.0039 |
| 1audited figures, 2 metric ton (t), 3US$, 4US$ million | ||||
Editing by Reiner Simanjuntak