Inco invests profits, withholds dividends

JAKARTA (JP): PT International Nickel (Inco) will not pay shareholder dividends for the 2000 financial year despite a sharp increase in its net income.

Inco's president Rumengan Musu said here on Thursday that the majority of the profit would be retained to anticipate the expected surge in 2001 operating costs.

"Another component of the profit will be used to finance the company's long-term debts," he told reporters following the company's annual shareholders' meeting.

According to Musu, the company's total debts outstanding at year-end 2000 stood at US$423 million.

Last year, Inco's net profit surged to US$80.5 million, or 32 cents per share, from $21.3 million or nine cents per share, the previous year.

Musu said that fuel costs escalated dramatically during 2000, comprising more than 40 percent of unit production costs. The average cost of oil in 2000 was $25.08 per barrel, compared to $15.27 per barrel in 1999.

Beginning early this month, Pertamina totally removed the subsidiy on the sales of fuel to mining companies. Under the new policy, the fuel price sold to mining companies rose by over 200 percent.

However, many mining companies have voluntarily purchased fuel at international prices, even before the new fuel price policy was introduced.

"All the shareholders at the meeting agreed to utilize the company's profit to pay debts and bolster operations, instead of distributing dividends," Musu said.

For the year 2000, the company, which is 58.7 percent owned by leading nickel producer Inco Limited of Canada, produced 59,200 tons of crude nickel, compared to 45,400 tons in the previous year.

This year's production is projected to increase to approximately 68,000 tons, he said.(03)