Feb. 06 - N.TSE - P.T. INTERNATIONAL NICKEL INDONESIA 1997 EARNINGS OF
US$24.3 MILLION REFLECT ADVERSE WEATHER CONDITIONS
JAKARTA, Feb. 6 /CNW/ - P.T. International Nickel Indonesia
(''P.T. Inco'') announced today its unaudited results for 1997. Net earnings
for the year 1997 were $24.3 million, or 10 cents per share, compared with
$61.2 million, or 25 cents per share, in 1996. A loss of $1.1 million, or nil
per share, was incurred for the fourth quarter of 1997, compared with net
earnings of $7.2 million, or three cents per share, in the corresponding
period of 1996.
The decrease in net earnings in the fourth quarter of 1997, relative to
the corresponding 1996 period, was due to lower deliveries, attributable to
the loss of production resulting from the effect of the ''El Nino'' weather
phenomenon on the Company's ability to generate hydroelectric power, and lower
nickel price realizations. Results for the year 1997, relative to 1996,
principally reflected lower deliveries and lower nickel price realizations.
The Company's net realized price for nickel in matte averaged $2.50 per
pound in 1997 and $2.30 per pound in the fourth quarter of 1997, compared with
$2.72 per pound and $2.53 per pound, respectively, in the corresponding
periods of 1996. The selling price of the Company's nickel in matte, an
intermediate product which is sold under long-term U.S. dollar denominated
contracts, is determined by a formula which is based upon the London Metal
Exchange cash price for nickel.
Production in the fourth quarter of 1997 was adversely affected by the
drought conditions associated with the ''El Nino'' weather phenomenon.
Production of nickel in matte for the fourth quarter of 1997 was 8.6 million
pounds, compared with the 12.7 million pounds recorded in the corresponding
1996 period. As a consequence of the drought conditions, the Company was
unable to generate sufficient power from its hydroelectric facilities to power
its three electric furnaces and undertook aggressive action to reduce the
impact of the drought on the Company's future production. This action included
shutting down two of the Company's electric furnaces while completing a major
deepening of the channel from Lake Towuti to increase the flow of water to the
hydroelectric facilities during periods of low rainfall and low lake levels.
The work was completed on time, and by the end of 1997 rainfall had returned
to the region, allowing the Company to return to production in January 1998.
The resultant loss of production in the fourth quarter, relative to planned
production, was approximately 20 million pounds of nickel in matte. Production
for the year 1997 was significantly lower than usual due to the scheduled
major rebuild and upgrade of Furnace No. 1 in the first half of the year and
by the effects of the drought conditions in the second half of the year.
Cash provided by operating activities was $62.2 million in 1997, down
from $190.0 million for the year 1996, principally reflecting lower earnings.
Capital expenditures were $239.1 million in 1997, compared with $177.5 million
in 1996, reflecting increased expenditures associated with the expansion
project. The Company's long-term debt increased to $290.4 million at December
31, 1997 from $111.9 million at December 31, 1996, principally reflecting the
drawdown by the Company of $178.5 million under its available credit
facilities to finance its expansion project.
The Company's $580 million expansion program to increase its annual
production capacity by 50 per cent remains on schedule and on budget. The
Company, subject to adequate seasonal rainfall, expects to produce
approximately 95 million pounds of nickel in matte in 1998, reaching an annual
rate of 115 million pounds in late 1998, with gradual increases in production
in 1999 and full production at the new rate of 150 million pounds in 2000.
<<
The Company's summarized results were as follows:
Fourth Quarter Year
1997 1996 1997 1996
---- ---- ---- ----
Nickel in matte production:
- million pounds 8.6 12.7 70.6 87.1
- thousand tonnes 3.9 5.8 32.0 39.5
Nickel in matte deliveries:
- million pounds 7.8 16.6 69.0 89.8
- thousand tonnes 3.6 7.5 31.3 40.7
Average realized price
per pound $2.30 $2.53 $ 2.50 $ 2.72
Net sales - millions $18.3 $42.4 $174.9 $247.5
Net earnings (loss)
- millions $(1.1) $ 7.2 $ 24.3 $ 61.2
Net earnings per share $ - $0.03 $ 0.10 $ 0.25
>>
At December 31, 1997, the Company's inventories of nickel in matte were
2.2 million pounds (1,016 tonnes), compared with 1.5 million pounds (670
tonnes) at September 30, 1997 and 0.6 million pounds (301 tonnes) at December
31, 1996. Variations in inventories and deliveries are largely due to shipment
scheduling.
UNAUDITED CONDENSED FINANCIAL STATEMENTS ARE ATTACHED.
Note: All dollar amounts are expressed in United States currency.
<<
P.T. INTERNATIONAL NICKEL INDONESIA
CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
U.S. $ in Thousands Except Per Share Amounts
Fourth Quarter Year
-------------- ---------------
1997 1996 1997 1996
-------- -------- -------- --------
Sales $ 18,287 $ 42,391 $174,929 $247,538
Cost of Goods Sold 21,954 21,800 131,051 153,236
-------- -------- -------- --------
Gross Profit (Loss) (3,667) 20,591 43,878 94,302
Selling, General and
Administration Expenses (2,461) 1,585 3,259 4,248
-------- -------- -------- --------
Operating Profit (Loss) (1,206) 19,006 40,619 90,054
-------- -------- -------- --------
Interest Expense 1,388 1,389 5,537 6,137
Other (Income) Expense (1,065) (767) 358 (4,077)
-------- -------- -------- --------
323 622 5,895 2,060
-------- -------- -------- --------
Earnings (Loss) Before
Income Taxes (1,529) 18,384 34,724 87,994
Income Taxes (459) 11,203 10,424 26,803
-------- -------- -------- --------
Net Earnings (Loss) $ (1,070) $ 7,181 $ 24,300 $ 61,191
-------- -------- -------- --------
-------- -------- -------- --------
Net Earnings Per Share $ - $ 0.03 $ 0.10 $ 0.25
-------- -------- -------- --------
-------- -------- -------- --------
P.T. INTERNATIONAL NICKEL INDONESIA
CONDENSED BALANCE SHEETS
(Unaudited)
U.S. $ in Thousands
December 31
1997 1996
---------- ----------
ASSETS
Cash and Cash Equivalents $ 54,345 $ 88,906
Trade Receivables from Affiliates 401 12,980
Inventories 58,567 62,578
Other Current Assets 41,499 29,533
---------- ----------
Total Current Assets 154,812 193,997
Property, Plant and Equipment 414,960 440,185
Construction in Progress 460,229 231,882
Other Assets 50,284 42,766
---------- ----------
Total Assets $1,080,285 $ 908,830
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade Payables $ 17,492 $ 21,722
Amounts Due to Affiliates 4,370 1,096
Income Taxes Payable - 2,904
Other Current Liabilities 63,114 63,928
---------- ----------
Total Current Liabilities 84,976 89,650
Long-Term Debt 290,350 111,850
Accrued Pension Benefits 7,670 13,968
Deferred Income Taxes 76,757 72,347
---------- ----------
Total Liabilities 459,753 287,815
Shareholders' Equity 620,532 621,015
---------- ----------
Total Liabilities and
Shareholders' Equity $1,080,285 $ 908,830
---------- ----------
---------- ----------
P.T. INTERNATIONAL NICKEL INDONESIA
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
U.S. $ in Thousands
Year
-------------------------
1997 1996
---------- ----------
Operating Activities:
Earnings Before Income Taxes $ 34,724 $ 87,994
Adjustments to Reconcile
Earnings Before Income Taxes
to Cash Provided
by Operating Activities:
Depreciation, Depletion and
Amortization 39,744 47,764
Income Taxes (16,119) (17,581)
Decrease (Increase) in Non-Cash
Working Capital Related
to Operations 10,055 71,044
Other (6,240) 746
---------- ----------
Cash Provided
by Operating Activities 62,164 189,967
---------- ----------
Investing Activities:
Capital Expenditures (239,048) (177,453)
Deferred Charges and Other (11,336) (16,509)
---------- ----------
Cash Used for Investing Activities (250,384) (193,962)
---------- ----------
Cash Shortfall Before
Financing Activities (188,220) (3,995)
---------- ----------
Financing Activities:
Dividends Paid (24,841) (24,841)
Bank Loan 178,500 111,850
Repayment of Long-Term Debt - (87,500)
---------- ----------
Cash Provided by (Used for)
Financing Activities 153,659 (491)
---------- ----------
Cash and Cash Equivalents:
Decrease in Year (34,561) (4,486)
Balance at Beginning of Year 88,906 93,392
---------- ----------
Balance at End of Year $ 54,345 $ 88,906
---------- ----------
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For further information: please contact,
Investor Relations: Kurt Barnes (212) 612-5788;
Media Relations: Jerry Rogers (416) 361-7754 |
