PT Inco reports $800,000 loss

JAKARTA (JP): PT International Nickel Indonesia (PT Inco) announced on Wednesday an audited loss of US$800,000 for the third quarter of 1998, compared with net earnings of $8.3 million, or three cents per share, for the same period last year.

Inco said in a statement that net earnings for the first nine months of 1998 were $9.9 million, or four cents per share, compared with $25.4 million, or 10 cents per share in the corresponding period of 1997.

The statement said that the result for the third quarter and first nine months of 1998, compared with the corresponding 1997 period, reflected significantly lower nickel price realization and smaller deliveries. These were only partially offset by reduced production costs.

The company's realized price for nickel averaged $1.67 per pound in the third quarter of 1998, compared with $2.43 per pound in the same period in the previous year, the statement said.

The selling price of the company's nickel, which is sold under long-term U.S. dollar denominated contracts, is determined by a formula that is based on the London Metal Exchange cash price for nickel.

According to the statement, the volume of the company's production for the third quarter of this year was 7,800 metric tons, compared with 11,600 tons in the same period last year.

The statement said that the company's long-term debt increased by $130.9 million in the first nine months of 1998 to $421.3 million at the end of September this year to finance the company's expansion to encourage annual production capacity by 50 percent to 68,000 tons.

A number of the company's expansion project facilities have already started operating, and the expansion process is expected to be almost completed by the end of the year.

Its new hydroelectric facilities, despite some construction delays, the company said, are scheduled for completion in the second half of 1999.

As a consequence of the delay, the total expansion project costs are expected to increase by approximately 10 percent over the original estimate of $580 million. (29)