Inco earns $5.2 million in first quarter

JAKARTA (JP): Nickel producer PT International Nickel Indonesia (Inco) announced unaudited earnings of $5.2 million for the first quarter of 1998, compared to $7.1 million for the first quarter of 1997.

The company said the decrease in net earnings for the first quarter of 1998 was due to lower nickel price realizations, partially offset by higher deliveries and reduced production costs, the company said in a statement.

Inco suffered a loss of US$1.1 million for the fourth quarter of last year.

The improvement seen between the last quarter of last year and the first quarter of 1998 was due to higher deliveries, partially offset by lower price realization, it said.

The realized price for matte nickel averaged $2.09 per pound in the first quarter of 1998, compared to $2.59 per pound in the corresponding period last year. US$2.30 per pound was achieved in the fourth quarter of 1997.

Production of matte nickel in the first quarter of 1998 was 20.1 million pounds, compared to 17.7 million pounds for the same period in 1997, and 8.6 million pounds in the fourth quarter of last year.

Production in the first quarter of 1997 was affected by the renovation of one of the company's three electric furnaces.

In the first quarter of 1998, all processing facilities were available but production was constrained by the availability of electric power. The company receives its electricity from a hydroelectric generator which is currently unable to operate at full capacity because of low water levels in the Soroako project area, the company explained.

However, the adverse effect of subnormal rainfall caused by the El Nio weather phenomenon has been mitigated by the benefits of a project to increase the flow of water to the company's hydroelectric facilities during periods of low rainfall, which was completed last December.

"Company production was approximately 75 percent of capacity in the first quarter of 1998," the company said.

The company's long term debt increased by 32.2 percent to $322.7 million at the end of March this year, reflecting draw- downs from available credit facilities to finance a project to increase the annual production capacity by 50 percent.

"The project remains within its budget and on schedule," the company said. (jsk)