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Sat, 13 Feb 1999

JP/PT Inco's net profit plummets 74.5 percent

PT Inco's net profit plummets 74.5 percent

JAKARTA (JP): Publicly listed nickel producer PT International Nickel Indonesia (Inco) said on Friday its net profit had dropped by 74.5 percent to US$6.2 million in 1998 from $24.3 million in 1997.

Company president director Rumengan Musu said on Friday that the drop in profits was caused by the depressed price of nickel in the world market.

"The year 1998 was a very difficult year for the nickel industry. The cash price of nickel on the London Metal Exchange fell 54 percent from March 1997 to the end of last year due to the economic weakness in Asia and concerns about the short-term nickel supply-demand outlook," he said.

"Despite the very difficult market situation, Inco still gained profit last year," he said in a statement.

Musu said the company, which is operating a nickel mine in Soroako, Southeast Sulawesi, suffered a loss of $3.7 million in the fourth quarter of last year, compared to the loss of $1.1 million it suffered in the corresponding period of 1997.

He said the price for nickel in matte averaged $4,034 per ton or $1.83 per pound in 1998 and $3,461 per ton or $1.57 per pound in the fourth quarter of 1998.

In comparison, price for nickel in matte averaged $5,512 per ton or $2.5 per pound in 1997 and $5,071 per ton or $2.30 per pound in the fourth quarter of 1997.

Inco's nickel output reached 35,500 tons in 1998 and 8,600 tons in the fourth quarter of the year, compared to 32,000 tons for 1997 and 3,900 tons in the same period of 1997.

Musu said the company had almost completed construction of its new production facilities, with the aim of increasing its annual output by 50 percent to 68,000 tons of nickel in matte in 2000.

Construction of the new processing facilities was to be completed in the first quarter of 1998 and the new hydroelectric facilities were expected to be finished in the second quarter of this year.

Musu said Inco expected to increase its nickel output to 38,000 tons this year, but this target would be dependent on the amount of rainfall this year. (jsk)