Inco's profit fell in third quarter

JAKARTA (JP): The consolidated net profit of publicly-listed PT International Nickel Indonesia (Inco) fell 55 percent in the third quarter this year to US$14.5 million from $31.6 million in the same period of 1995.

Inco announced yesterday its net income per share dropped to 12 U.S. cents for the July to September period of this year from 22 cents in the corresponding period of 1995.

The company's consolidated net profit for the first nine months of this year plunged 35 percent to $54 million, or 22 cents per share, from $70.6 million or 28 cents per share in the same period of 1995.

The sharp drop in profits in the first nine months of this year were mainly caused by lower nickel prices, less deliveries and increased production costs, Inco said.

The company sold its nickel in matte for $2.63 a pound on average in the third quarter of 1996, compared with $3.03 a pound in the corresponding period of 1995.

In the first nine months of 1996, the company sold it for $2.77 a pound on average, compared with $2.95 a pound in the corresponding period of 1995.

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

Inco said it produced 23.7 million pounds of nickel in matte in the third quarter of 1996, compared to 23.4 million pounds in the third quarter of 1994.

Higher oil and supplies prices pushed up production costs in the third quarter this year.

The company said it expected to lose about six million pounds of nickel in matte production in 1996 because of an eruption in one of the company's three electric furnaces.

An eruption in Furnace No. 3 on Sept. 10, 1996, killed an employee working nearby.

The company said a team of PT Inco staff and consultants in electric furnace design, operation and related-disciplines were investigating the incident and implementing a program to assure that the existing furnaces were safe.

Repairs to Furnace No. 3 are continuing. It is expected to be operating in December, and running at a full capacity in January next year. (hen)