Inco’s Indonesian subsidiary reports lower revenue, profit

P.T. International Nickel Indonesia, the 58% owned subsidiary of Toronto-based Inco (TSE), recently reported a 48% decline in its first-quarter earnings compared with last year’s levels.

P.T. Inco., which produces nickel in matte for sale in Japan, reported net earnings of US$9.6 million or US4 cents a share for the three months ended March 31, compared with US$18.6 million or US8 cents a share in the same period last year.

First-quarter revenues also fell to US$45.2 million from US$49.1 million in the equivalent 1990 period.

The company attributed the earnings’ decline to lower nickel deliveries and higher unit production costs at Indonesia where an explosion in an electric furnace resulted in operating problems.

The higher costs were partially offset by higher realized nickel prices which averaged US$3.02 per lb. in the first quarter of 1991 compared with US$2.74 per lb. in the 1990 period.

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

In the first quarter of 1991, P.T. Inco produced 15.6 million lb. nickel matte, down from 17.3 million lb. in the equivalent 1990 period.

Shareholders approved a final dividend for 1990 of US15 cents a share, payable April 30.