Inco's PT Int'l Nickel year-end earnings
Inco Ltd N
Shares issued 181,997,763 Feb 6 close $28.24
Thu 7 Feb 2002 News Release
Mr. Rumengan Musu reports
PT INTERNATIONAL NICKEL INDONESIA TBK REPORTS 2001 EARNINGS O ...
PT International Nickel Indonesia Tbk (PT Inco) has released its audited
results for 2001. Net earnings for the year 2001 were $9.3-million, or four
cents per share, compared with $80.5-million, or 32 cents per share, in
2000. A loss of $8-million, or three cents per share, was incurred in the
fourth quarter of 2001, compared with net earnings of $16.9-million, or
seven cents per share, in the corresponding period of 2000.
Commenting on the year's results, Rumengan Musu, president and chief
executive officer, said that: "While we achieved a record level of
production in 2001, this was a challenging year for the company in terms of
profitability due to the significant decline in the company's realized
nickel price. We continued to make steady progress at increasing our
production rate to our expanded design capacity. Total production was 138
million pounds, slightly below our target of 140 million pounds due to
lower-than-expected ore grades. However we were encouraged by the fact that
the processing facilities operated above the planned throughput rate,
almost compensating for the lower grades. Despite lower earnings, we had
more than enough cash flow to fully meet our debt servicing requirements,
which totalled $104.9-million. Our efforts to conserve cash must continue,
particularly in this uncertain economic and political environment."
The company's realized price for nickel in matte in the fourth quarter of
2001 averaged $3,928 per tonne ($1.78 per pound), down 36 per cent from
$6,089 per tonne ($2.76 per pound) in the fourth quarter of 2000. For the
year 2001, the company's realized price averaged $4,836 per tonne ($2.19
per pound), compared with $6,744 per tonne ($3.06 per pound) in 2000.
Production of nickel in matte for the fourth quarter of 2001 was 15,500
tonnes (34.2 million pounds), compared with 15,800 tonnes (34.9 million
pounds) in the corresponding 2000 period. For the year 2001, the production
of nickel in matte was 62,600 tonnes (138.1 million pounds), compared with
59,200 tonnes (130.5 million pounds) in 2000.
Mine ore grades were affected by several factors, including more complex
geology and excessive dilution resulting from a higher throughput rate.
More extensive drilling, test pitting and sampling to better delineate the
orebody for improved mine planning and some contract stripping to expose
more ore are well under way to improve this situation. These higher
preparatory activities, combined with the higher plant throughput of
lower-than-normal ore grade, contributed to a 4-per-cent increase in the
company's nickel unit cash cost of production in the fourth quarter of
2001, compared with the corresponding 2000 period. The company believes the
actions being taken to stabilize mined ore grades will ensure that PT Inco
can achieve the production targets at a reduced cost.
Cash provided by the company's operating activities, but before capital
expenditures, was $140.2-million for the year 2001, including $21.6-million
in the fourth quarter, compared with $190.1-million in the year 2000.
Capital expenditures for the year 2001 were $28.6-million, down from
$32.7-million in the year 2000. After financing debt repayments and capital
expenditures, net cash flow was $6.8-million in the year 2001, compared
with $34.8-million in the year 2000.
At Dec. 31, 2001, the company's inventories of nickel in matte were 3,512
tonnes (7.7 million pounds), compared with 2,055 tonnes (4.5 million
pounds) at Sept. 30, 2001, and 1,365 tonnes (three million pounds) at Dec.
31, 2000. The company's production of nickel in matte, an intermediate
product, is sold under long-term United States dollar denominated contracts
to Inco and Sumitomo Metal Mining Co., Ltd. Variations in inventories and
deliveries are largely due to shipment scheduling.
CONDENSED STATEMENT OF EARNINGS
Three months ended Dec. 31
(in thousands of U.S. dollars)
2001 2000
Sales $55,922 $100,785
Cost of goods sold 66,780 71,268
------- --------
Gross profit (loss) (10,858) 29,517
Selling, general
and admin expenses 786 (1,816)
------- --------
Operating profit
(loss) (11,644) 31,333
------- --------
Interest expense 3,307 9,287
Other income (3,478) (1,273)
------- --------
(171) 8,014
------- --------
Earnings (loss)
before income
taxes (11,473) 23,319
Income taxes (3,454) 6,387
------- --------
Net earnings
(loss) $(8,019) $16,932
======= =======
Net earnings
(loss) per share (0.03) 0.07
CONDENSED STATEMENT OF EARNINGS
Year ended Dec. 31
(in thousands of U.S. dollars)
2001 2000
Sales $296,394 $401,607
Cost of goods sold 259,783 248,282
-------- --------
Gross profit
(loss) 36,611 153,325
Selling, general
and admin expenses 2,499 1,900
-------- --------
Operating profit
(loss) 34,112 151,425
-------- --------
Interest expense 23,395 36,123
Other income (2,678) (1,442)
-------- --------
20,717 34,681
-------- --------
Earnings (loss)
before income
taxes 13,395 116,744
Income taxes 4,130 36,262
-------- --------
Net earnings
(loss) $ 9,265 $ 80,482
======== ========
Net earnings
(loss) per share 0.04 0.32