Jakarta, February 16, 2012 – PT Vale Indonesia Tbk (“PT Vale Indonesia”, “PTVI” or the “Company”; IDX: INCO) today announces its unaudited results for the fourth quarter of 2011 (4Q11). PTVI delivered 15,604 metric tons (t) of nickel in matte in 4Q11. For 2011 and 2010 the Company delivered 66,815 t and 75,839 t of nickel in matte respectively.
Productions for nickel in matte in the third and fourth quarters of 2011 were 18,073 and 13,728 t, respectively. As expected, the Company produced less nickel in matte in the fourth quarter compared to previous quarter due to the rebuild of its Furnace #2 as part of the plan to increase the production. While shutting it down, we had an incident that impacted Furnace #1 and the Company decided to utilize the situation to move forward scheduled maintenance work on this Furnace #1 initially scheduled for late 2012.
The company operated two furnaces in November and December 2011. The Company recorded an average realized price of nickel in matte of US$14,928 per t during 4Q11, compared to US$17,735 per t in 3Q11. Throughout the year, the Company’s average realized price of US$18,296 pert, was about 10% more than the 2010 average realized price. Sales were US$237.0 million for the three months ended December 31, 2011 and US$290.1 million in 3Q11. Sales in 2011 declined by about 3% compared to the 2010 net sales.
The Company’s total cost of goods sold (COGS) in 4Q11 increased by more than 16% to US$194.1 million from US$166.8 million in 3Q11 mainly due to increases in services and contracts.
The Company’s total cost of goods sold (COGS) in 4Q11 increased by more than 16% to US$194.1 million from US$166.8 million in 3Q11 mainly due to increases in services and contracts.
Earnings before interest, taxes, depreciation and amortization (EBITDA) totalled US$48.0 million in 4Q11, compared to US$134.2 million in 3Q11. EBITDA in 2011 of US$548.8 million was 19% less than US$677.6 million EBITDA obtained in 2010. Lower net earnings and EBITDA in 4Q11 in comparison to 3Q11 were mainly due to higher COGS as well as lower average realized price during the period. The Company recorded net earnings of US$13.1 million in 4Q11 (US$0.001 per share) compared to US$81.7 million (US$0.008 per share) achieved in the previous quarter. Total net earnings in 2011 of US$333.0 million were 24% lower than net earnings of US437.4 million in 2010.
In 4Q11 the Company used 13,009 kilolitres of diesel fuel at an average cost of US$0.85 per litre while in 3Q11 it consumed 18,492 kilolitres at an average cost of US$0.87 per litre.
In this same period the Company also consumed 425,089 barrels of High Sulphur Fuel Oil (HSFO) at an average cost of US$105.99 per barrel compared to 697,872 barrels at an average cost of US$105.56 per barrel in the previous quarter. PT Vale Indonesia paid interim dividends of US$99.4 million in November 2011. The total dividend payments on a cash basis reached US$244.4 million in 2011. By end of 2011 the Company had nearly US$399 million of cash and cash equivalents.
Production recovery in 2012 and projects to improve competitiveness and support growth agenda
PTVI completed Furnace #1 repair in mid of January 2012. The repair also included maintenance work
scheduled for late 2012. Hence the Company expects that Furnace #1 will run throughout 2012 without any stoppage for maintenance bringing production level back to normal. The Karebbe hydroelectric power plant came on stream in September 2011 and is projected to add 90 megawatts of average generating capacity. The plant supplies power to our operations, which reduces our production costs and enables the potential expansion of production of nickel in matte capacity. The rebuild of Furnace #2 has started in November 2011 and is still underway. It will commence its commissioning stage in March 2012. The rebuild will increase Furnace #2’s power capacity and enable it to produce more nickel in matte. PTVI also continued the implementation of the Operations and Maintenance Improvement Program (OMIP) and other projects according to its plan to improve the productivity and reduce costs. The company has successfully completed the rebranding program of becoming PT Vale Indonesia Tbk.PT Vale Indonesia’s mission is to transform natural resources into prosperity and sustainable development. We are committed to improve the competitiveness of the Company as well as to implement our plan to increase the level of annual production to 120,000 t in the next years, given the high mineral potential in our concession areas.