Jakarta, July 30, 2012 –
PT Vale Indonesia Tbk (“PT Vale” or the “Company”, IDXTicker: INCO) today announces its unaudited results for the second quarter of 2012 (2Q12).
During 2Q12 PT Vale re‐established its normal production capacity of four electric furnaces as Electric Furnace 2 recommenced operations in May after a major upgrade and shutdown which began in early of November 2011. As a result, the Company produced 16,562 metric tons (t) nickel in matte which was 33% more than 1Q12 production of 12,431 t. Coinciding with this increase in production, the Company delivered 30% more nickel in matte to its customers in the second quarter than in the first quarter of 2012, from 12,514 t to 16,250 t. Compared to results of the first half of 2011, production and sales volumes in the first half of this year were 17% and 18% lower respectively. However the Company is positive about its increased production capacity going forward as it produced more than 7,000 t of nickel in matte in June.
The LME nickel price fluctuated unfavourably throughout 2012 particularly in the second quarter. PT Vale’s average realized price for the second quarter of 2012 is US$13,816 per ton, which was 11% lower than the 1Q12 average realized price. Despite that, the Company recorded 16% higher sales in 2Q12 than in 1Q12 mainly because of higher nickel in matte delivered.
The Company’s average price in the first half of 2012 declined by 28% from US$20,052 per t realized in first half of 2011 contributing significantly to a 41% reduction in sales period over period. The Company’s total cost of goods sold (COGS) in 2Q12 increased by 21% compared
to COGS incurred in the 1Q12 as it sold 30% more nickel in matte in the respective quarters.
Meanwhile, the COGS for the first six months of 2012 increased slightly by 4% from US$367 million in the first six months of 2011 mainly because of higher fuel prices. Earnings before interest, taxes, depreciation and amortization (EBITDA) totalled US$30.9 million in 2Q12, compared to US$33.8 million in 1Q12. Lower EBITDA recorded in 2Q12 than in 1Q12 was due to
lower average realized price during the period despite higher volume delivered to customers. Comparing to EBITDA in the first half of 2011, EBITDA achieved in the first half of 2012 was also 82% lower due to lower delivered volume and lower average realized price.During 2Q12 PT Vale re‐established its normal production capacity of four electric furnaces as Electric Furnace 2 recommenced operations in May after a major upgrade and shutdown which began in early of November 2011. As a result, the Company produced 16,562 metric tons (t) nickel in matte which was 33% more than 1Q12 production of 12,431 t. Coinciding with this increase in production, the Company delivered 30% more nickel in matte to its customers in the second quarter than in the first quarter of 2012, from 12,514 t to 16,250 t. Compared to results of the first half of 2011, production and sales volumes in the first half of this year were 17% and 18% lower respectively. However the Company is positive about its increased production capacity going forward as it produced more than 7,000 t of nickel in matte in June.
The LME nickel price fluctuated unfavourably throughout 2012 particularly in the second quarter. PT Vale’s average realized price for the second quarter of 2012 is US$13,816 per ton, which was 11% lower than the 1Q12 average realized price. Despite that, the Company recorded 16% higher sales in 2Q12 than in 1Q12 mainly because of higher nickel in matte delivered.
The Company’s average price in the first half of 2012 declined by 28% from US$20,052 per t realized in first half of 2011 contributing significantly to a 41% reduction in sales period over period. The Company’s total cost of goods sold (COGS) in 2Q12 increased by 21% compared
to COGS incurred in the 1Q12 as it sold 30% more nickel in matte in the respective quarters.
Meanwhile, the COGS for the first six months of 2012 increased slightly by 4% from US$367 million in the first six months of 2011 mainly because of higher fuel prices. Earnings before interest, taxes, depreciation and amortization (EBITDA) totalled US$30.9 million in 2Q12, compared to US$33.8 million in 1Q12. Lower EBITDA recorded in 2Q12 than in 1Q12 was due to
The Company recorded earnings of US$1.7 million in 2Q12 (US$0.0002 per share) compared to US$3.8 million (US$0.0004 per share) achieved in 1Q12. Meanwhile, earnings of the first half of 2012 and 2011 were US$5.5 million and US$238.1 million
respectively.
In 2Q12, the Company used 554,226 barrels of High Sulphur Fuel Oil (HSFO) at an
average cost of US$ 116.33 per barrel compared to 410,095 barrels at an average
cost of US$110.14 per barrel in the previous quarter.
In 2Q12, the Company also used 13,222 kilolitres of diesel fuel at an average cost of
US$0.90 per litre while in 1Q12 it consumed 12,691 kilolitres at an average cost of
US$0.86 per litre.
The Company’s cash and cash equivalent as of June 30, 2012 and March 31, 2012
were US$138.5 million and US$300.4 million respectively.
During the second quarter of 2012 PT Vale had concluded the 2011 final dividend
payment of US$84.4 million (around 25% of 2011 earnings). That final dividend
payment reflects its commitment to create value and generate returns for its
shareholders, as well as its commitment to disciplined capital allocation.
In the same quarter the Company spent another nearly US$43 million in capital
expenditures, mainly in the Electric Furnace 2 rebuild, sustaining capital and cost
efficiency according to the plan to increase the annual production to 120,000 t in the
next few years.
PT Vale is continually strengthening its commitment to improving its competitiveness
by conducting several projects and initiatives such as the Operations and
Maintenance Improvement Program (OMIP) and the Coal Conversion Project for the
dryers (CCP1). These projects are expected to improve cost efficiency and savings as
well as increasing production.
At the same time the Company has taken necessary measures to prepare plans to
reduce costs focusing mainly on the fixed costs. Considering these plans together
with the new potential of the production capacity, PT Vale believes that it is on the
right track to achieve its mission to transform natural resources into prosperity and
sustainable development.