Vale?s profit falls 70 percent in 2015
Thursday, February 25 2016 - 01:41 PM WIB
IDX-listed nickel mining company PT Vale Indonesia Tbk announced on Thursday that it booked US$50.5 million in 2015, down by 70.7 percent from $172.3 million in the previous year due the drop in nickel price.
The firm said its cash and cash equivalents as of Dec. 31, 2015 stood at $194.8 million, down from $302.3 million in 2014. Current assets as of Dec. 31, 2015 also included the short‐term investments in the form of time deposits in the amount of US$90.1 million.
?PT Vale has been, and will continue to, prudently control its spending to preserve cash,? the firm said.
During the year, the company disbursed approximately $106.4 million in capital expenditures. That disbursement is in line with the capital expenditure guidance mentioned in the third quarter of 2015 results release.
The company delivered the highest annual production volume in its history with production of 81,177 metric tons (t), surpassing the previous record set one year earlier.
The firm?s nickel in matte production in the fourth quarter of 2015 (4Q15) was approximately 8 percent higher than the production volume in 4Q14. This represents the highest quarterly production volume in the firm?s history, even as the company saw water levels fall at its hydro‐dams to near minimum levels toward the end of the year, impacting power supply. After a thorough examination, management of the company decided to activate thermal generators to supply additional power to the furnaces as the operation continued to generate positive cash margins. In early 2016, however, the water levels at our hydro‐dams began to improve significantly thanks to higher levels of rainfall. Consequently, the company stopped operating thermal generators by mid‐January (2016).
Sales volume in 2015 increased by 4 percent over 2014 and by 12 percent quarter over quarter (4Q15 vs. 4Q14). However, the average selling price declined by 27 percent in 2015 over 2014 due to lower nickel prices, resulting in a revenue decrease of 24 percent for the year.
The cost of revenue for the Company declined by 8 percent in 2015 over 2014. The main drivers of the cost reduction were lower fuel and employment costs as well as improved monitoring of discretionary spending. Operating, finance and other costs also declined by 20 percent, 21 percent and 35 percent in 2015 over 2014, respectively. These all reflect continuous improvement in cost discipline and operating productivity at PT Vale and highlight the success of the Company?s cost reduction strategy.
In 2016, Vale plans to produce approximately 80,000 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 without compromising the Company?s foremost value: Life Matters Most.
?We are proud of and grateful for this achievement. It is clearly a result of hard work and devotion from all employees of the Company,? said CEO and President Director Nico Kanter. ?At the same time it is critical that we continue to improve our cost and production efficiencies as we remain cautious toward the nickel price in 2016.?
Editing by Johannes Simbolon