RNS Number:2365R
Inco Ld
8 February 2002
PT INTERNATIONAL NICKEL INDONESIA Tbk REPORTS
2001 EARNINGS OF $9.3 MILLION (U.S.) REFLECTING THE SIGNIFICANT
DECLINE IN NICKEL PRICES
JAKARTA, February 7, 2002 --- PT International Nickel Indonesia Tbk ("PT Inco")
announced today 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 $8.0 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," said Mr. Musu.
"However we were encouraged by the fact that the processing facilities operated
above the planned throughput rate, almost compensating for the lower grades," he
noted. "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," he added.
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 underway
to improve this situation. These higher preparatory activities, combined with
the higher plant throughput of lower than normal ore grade, contributed to a
four 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.
The Company's summarized results were as follows:
Fourth Quarter Year
2001 2000 2001 2000
Nickel in matte production:
- thousand tonnes 15.5 15.8 62.6 59.2
- million pounds 34.2 34.9 138.1 130.5
Nickel in matte deliveries:
- thousand tonnes 14.1 16.3 60.5 58.8
- million pounds 30.9 36.1 133.3 129.7
Average realized price:
- per tonne $ 3,928 $ 6,089 $ 4,836 $ 6,744
- per pound $ 1.78 $ 2.76 $ 2.19 $ 3.06
Net sales - millions $ 55.9 $ 100.8 $ 296.4 $ 401.6
Net earnings (loss)
- millions $ (8.0) $ 16.9 $ 9.3 $ 80.5
Net earnings (loss) per share $ (0.03) $ 0.07 $ 0.04 $ 0.32
At December 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
September 30, 2001 and 1,365 tonnes (3.0 million pounds) at December 31, 2000.
The company's production of nickel in matte, an intermediate product, is sold
under long-term U.S. dollar denominated contracts to Inco Limited and Sumitomo
Metal Mining Co, Ltd. Variations in inventories and deliveries are largely due
to shipment scheduling.
PT INTERNATIONAL NICKEL INDONESIA Tbk
CONDENSED STATEMENTS OF EARNINGS
(U.S. $ in Thousands Except Per Share Amounts)
Fourth Quarter Year
2001 2000 2001 2000
Sales $ 55,922 $ 100,785 $ 296,394 $ 401,607
Cost of Goods Sold 66,780 71,268 259,783 248,282
Gross Profit (Loss) (10,858) 29,517 36,611 153,325
Selling, General and
Administration Expenses 786 (1,816) 2,499 1,900
Operating Profit (Loss) (11,644) 31,333 34,112 151,425
Interest Expense 3,307 9,287 23,395 36,123
Other Income (3,478) (1,273) (2,678) (1,442)
(171) 8,014 20,717 34,681
Earnings (Loss) Before
Income Taxes (11,473) 23,319 13,395 116,744
Income Taxes (3,454) 6,387 4,130 36,262
Net Earnings (Loss) $ (8,019) $ 16,932 $ 9,265 $ 80,482
Net Earnings (Loss) Per Share $ (0.03) $ 0.07 $ 0.04 $ 0.32
PT INTERNATIONAL NICKEL INDONESIA Tbk
CONDENSED BALANCE SHEETS
(U.S. $ in Thousands)
December 31, December 31,
2001 2000
ASSETS
Cash and Cash Equivalents $ 43,490 $ 36,718
Trade Receivables from Affiliates 2,275 37,824
inventories 59,480 52,612
Taxes Receivable 20,943 17,335
Other Current Assets 4,030 5,249
Total Current Assets 130,218 149,738
Property, Plant and Equipment 1,055,085 1,121,020
Construction in Progress 39,259 25,469
Other Assets 5,143 4,580
Total Assets $1,229,705 $1,300,807
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade Payabies $ 7,862 $ 13,140
Amounts Due to Affiliates 14,810 14,721
Long-Term Debt Due Within One Year 64,820 64,820
Other Current Liabilities 20,621 20,569
Total Current Liabilities 108,113 113,250
Amounts Due to Affiliates 42,404 54,519
Long-Term Debt 226,812 291,621
Provision for Employee Benefits 2,959 2,920
Deferred income Tax Liabilities 113,981 110,031
Total Liabilities 494,269 572,341
Shareholders' Equity 735,436 728,466
Total Liabilities and
Shareholders' Equity $1,229,705 $1,300,807
PT INTERNATIONAL NICKEL INDONESIA Tbk
CONDENSED STATEMENTS OF CASH FLOWS
(U.S. $ in Thousands)
Year
2001 2000
Cash Flows from Operating Activities
Receipts from Customers $ 331,943 $ 390,788
Payments to Suppliers (163,719) (173,323)
Payments to Employees (22,302) (15,627)
Payment of Pension Contribution (2,601) (2,566)
Payment of Corporate Tax (3,196) (4,893)
Other Receipts 2,698 1,864
Other payments (2,592) (6,119)
Net Cash Flows Provided
by Operating Activities 140,231 190,124
Cash Flows from Investing Activities
Payments for Fixed Assets (28,572) (32,703)
Net Cash Flows Used for Investing Activities (28,572) (32,703)
Cash Flows from Financing Activities
Repayment of Long-Term Bank Loans (64,810) (64,809)
Repayment of Borrowings from Affiliates (12,116) (21,465)
Payment of Interest (27,961) (36,341)
Net Cash Flows Used for Financing Activities (104,887) (122,615)
Met Increase in Cash and Cash Equivalents 6,772 34,806
Cash and Cash Equivalents at
Beginning of Period 36,718 1,912
Cash and Cash Equivalents at End of Period $ 43,490 $ 36,718
This information is provided by RNS
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