The Jakarta Post
Publicly listed nickel producer PT Vale Indonesia has recorded higher revenue and earnings before interest and tax (EBIT) last year as nickel prices went up in the second half of 2019.
Despite booking a 5-percent year-on-year (yoy) decrease in nickel sales to 72,044 tons of nickel in matte last year, the company’s sales grew by 1 percent to US$782 million.
“The increase nickel prices clearly had a positive impact on our financial performance, compensating for the lack of production in the first semester of 2019,” Vale Indonesia president director and CEO Nico Kanter said in a statement obtained by The Jakarta Post on Thursday.
Realized nickel prices in 2019 averaged US$10,855 per ton, 6 percent higher than in 2018, the company said in the statement.
However, its cash and cash equivalent went down by $52.1 million to $249 million in 2019 as capital expenditure (capex) skyrocketed by 99 percent to $83.8 million.
The Indonesian government has been compelling miners to build smelters and process raw materials domestically prior to exporting through a ban on nickel ore exports to support the downstream industry.
Despite the lower cash, Vale Indonesia managed to lower its cost of revenue to $665.5 million, down 1 percent yoy from 2018’s $672.9 million. As a result, the subsidiary of Brazilian mining giant Vale SA booked an 8-percent yoy increase in EBIT to $89.1 million.
“Despite our lower production last year, we could still manage our costs carefully,” Nico said, adding that the company was optimistic that it could maintain the production rate this year while continuing to maintain cost efficiency.