Inco's 2003 profit tripled on higher nickel prices<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Publicly listed PT International Nickel Indonesia (Inco), a
\nlocal unit of the world's second largest nickel company Inco
\nLtd., announced that its audited net profit more than tripled
\nlast year on the back of higher nickel output and price.<\/p>\n
In a report to the Jakarta Stock Exchange (JSX) late on
\nThursday, the company said it had booked US$104.2 million in
\nprofit, up from $30.3 million in 2002. Sales also jumped by 58
\npercent to $509 million from $321 million.<\/p>\n
\"Our annual production of 155 million pounds of nickel in
\nmatte (last year) was the highest in our history and
\nsubstantially above our initial target of 140 million pounds,\"
\nsaid Inco chief executive officer Bing R. Tobing in a statement.<\/p>\n
In 2002, Inco produced 131.2 million pounds of nickel.<\/p>\n
Bing explained that the surge in the company's profit and
\nsales was mostly attributable to the sharp increase in the global
\nprice of nickel, with the company's realized price for nickel in
\nmatte averaging $7,117 per ton ($3.23 per pound) last year, up
\nfrom $5,114 ($2.32) in 2002.<\/p>\n
Bing said that for this year the company planned to boost its
\nnickel production to 160 million pounds, to take advantage of an
\nexpected surge in the price of nickel.<\/p>\n
At the same time, the company was also planning to reduce its
\noutstanding long-term debt balance, which currently stands at
\n$192.3 million, Bing said without disclosing the size of the
\nplanned debt reduction.<\/p>\n
Inco shares surged on the JSX on Friday by Rp 3,000 to Rp
\n37,500 per share following the news, after declining to the level
\nof Rp 33,000 in the last couple of weeks.<\/p>\n
The price of nickel last year skyrocketed to a 14-year high,
\ndriven mainly by a growing demand from producers of stainless
\nsteel and other alloys in China and the United States.<\/p>\n
But the growing demand outpaced supply, following an operation
\ncommotion at several giant nickel producers; a three-month labor
\nstrike hit the Inco mine in Ontario, Canada, and a labor dispute
\nrocked Falconbridge Ltd, the world's third largest nickel
\nproducer.<\/p>\n
Declines in the value of the U.S. dollar, in which nickel is
\npriced, against other currencies such as the euro have also
\ncontributed to the rising prices. The dollar has weaken by around
\n15 percent against the euro this year.<\/p>\n
But according to OAO GMK Norilsk Nickel, the world's largest
\nnickel producer, as quoted by several foreign media, the current
\nsurge in nickel prices was mostly due to speculated investment
\nfunds, rather than industry fundamentals.<\/p>\n
The company said that labor strike issues at several nickel
\nproducers were used by global investment funds to speculate on
\nnickel prices.<\/p>\n
Due to the rampant speculation, Moscow-based Norilsk projected
\nthat nickel prices this year would not be as strong as last year.
\nThe company produces 20 percent of the world's nickel supply.<\/p>",
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