PT Vale posts EBITDA of US$235.7M for 2018

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PT Vale posts EBITDA of US$235.7M for 2018

PT Vale Indonesia Tbk (“PT Vale” or the “Company”, IDX Ticker: INCO) today announced its audited results for 2018. The company booked EBITDA of US$235.7 million, mainly driven by a higher realized price for nickel and the ability to implement prudent cost management.

The average realized price in 2018 was 27% higher than in 2017. “The higher price definitely had a positive impact on our financial performance,” said Nico Kanter, CEO and President Director of the Company. “”

However, what differentiates us is our ability to manage our costs prudently. In early 2018, we launched a three-year program with a US$50 million cost reduction target. Since then, we implemented a series of initiatives to eliminate operational waste and improve efficiencies. That effort delivered US$10.8 million of the US$50 million target in 2018,

Nico Kanter, CEO and President Director

PT Vale recorded sales of US$776.9 million in 2018, 23% above sales recorded in 2017 of US$629.3 million. The average realized price for nickel in matte shipments in 2018 was US$10,272 per ton, an increase from the 2017 level of US$8,106 per ton. The Company’s cost of revenue in 2018 increased by US$50.1 million or 8% from US$622.8 million in 2017 to US$672.9 million. This was mainly due to higher fuel and coal prices.

At the end of 2018, we received exploration permits for the Sorowako, Bahadopi and Pomalaa Blocks. We also received exploitation permits for the Sorowako block. Accordingly, we are obligated to pay forestry non-tax state revenue (PNBP). The PNBP was applied retroactively to 2008, the year Government Regulation No. 2/2008 was issued. Excluding the one-off retroactive PNBP tax, the cost of revenue per metric ton in 4Q18, decreased by US$149 when compared to the previous quarter. The issuance of these long-awaited forestry permits give us legal certainty and reduce our business risks.

In 2018, PT Vale produced 74,806 metric tons of nickel in matte, a decrease of almost 3% from last year’s production of 76,807 metric tons. The decrease was mainly driven by a lower average nickel grade in 2018 and the impact of unplanned maintenance activities in 3Q18.

The Company has achieved more than 30 million person-hours and counting without a Lost Time Injury and received its first Aditama safety award from the government. The Company also won the Best of the Best award for Environmental Management from the Ministry of Energy and Mineral Resources for the 4th time in 2018. The Company will maintain its focus on improving cost efficiency to sustain competitiveness in the long term without compromising the Company’s foremost values: Life Matters Most and Prize Our Planet.

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4Q18 Results and Financial Highlight


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4Q18 Quarterly Result4Q18 Financial Statement

PT Vale posts EBITDA of US$235.7M for 2018