Inco's profit down in 2nd quarter

JAKARTA (JP): PT International Nickel Indonesia's (Inco) unaudited net profit for this year's second quarter plunged to $9.9 million (4 U.S. cents per share) from US$18.1 million (7 cents per share) in the same period last year.

This brought total first half earnings to $17 million (7 cents per share) against $39.5 million (16 cents per share) in the same period of 1996, Inco said.

The Canadian company, which is publicly listed on the Jakarta Stock Exchange, blamed lower output, lower nickel prices and higher production costs on the rebuilding and upgrading of a furnace at its plant in Soroako, South Sulawesi.

The company's net realized price for nickel in matte averaged $2.64 a pound in the second quarter, down from $2.84 a pound in 1996. For the first half of 1997, the net realized price averaged $2.61 per pound against $2.84 in 1996.

Production of nickel in matte fell to 18.7 million pounds in the second quarter from 25.6 million pounds a year earlier while production in the first six months fell to 36.4 million from 50.7 million pounds.

Inco said that as the rebuilding of Furnace No. 1 was completed in May, the plant should be able to operate at maximum capacity for the rest of the year.

The selling price of the company's nickel in matte, an intermediate product sold under long term contracts, is determined by a formula based on the London Metal Exchange cash price.

As of June 30, Inco's inventory of nickel in matte was 3.4 million pounds (1,536 tons), compared with 1.1 million pounds (499 tons) on March 31 and 600,000 pounds at the end of December. (08)