INCO doubles net profits in 2004
INCO doubles net profits in 2004
Fabiola Desy Unidjaja, The Jakarta Post, Jakarta
PT International Nickel Indonesia (INCO) doubled its net profit
in 2004 as higher nickel prices and record-setting production
boosted sales, company president and chief executive Bing Tobing
says.
Net profits rose US$265.1 million in 2004, from $104.2 million
the year before, supported by a 56 percent jump in sales revenues
from $509 million in 2003 to $792.1 million.
The sharp increase in sales was attributable to higher nickel
prices and a boost in production. The publicly listed company
produced 159.1 million pounds of nickel in 2004 -- the highest
ever for the firm -- up from 154.8 million pounds the previous
year.
"The production of 159 million pounds of nickel in matte was
the highest in our history and we are targeting an equally strong
output of 160 million pounds in 2005," Bing said.
As for the prices, nickel in 2004 averaged at $10,766 a ton,
or $4.88 a pound, up 51 percent from an average of $7,117 per
ton, or $3.23 per pound, in 2003 based on the benchmark prices at
the London Metal Exchange.
PT INCO is one of the largest nickel producer in Indonesia,
with 61 percent of its shares owned by Canada-based Inco Ltd.,
the world's second-largest nickel producer.
In the longer term, the company plans to boost its production
to 200 million pounds by 2009, and to achieve that, the firm
would develop another hydropower plant at Karabbe on the Larona
river in Southeast Sulawesi.
The dam is worth $150 million in investment, and a preliminary
survey surrounding the areas was already underway.
The company, which operates the nickel mine in Sorowako of
Southeast Sulawesi and is currently exploring another mine at
Bahudopi in Central Sulawesi, has two dams to support the
existing production process.
In total, it has a nickel mining license covering 218,000
hectares in South Sulawesi, Southeast Sulawesi and Central
Sulawesi.
"We are still considering several measures to finance the
construction. It can be from our own financial resources, issuing
bonds, or seeking loans from financial institutions," Bing said.
With the sound financial showing, the company is facing a
bright outlook in fulfilling its debts commitments, before
embarking on business expansion afterwards.
"We have an outstanding debt amounting to $115.4 million,
which is slated to be repaid by March next year, and the company
will have by then the ability to expand in a prudent manner,"
Bing said.
In 2004, it repaid about $77 million in maturing debts.