Jakarta, February 25, 2016 – PT Vale Indonesia Tbk (“PT Vale” or the “Company”, IDX Ticker: INCO) today announced its audited results for 2015 (FY15). The Company delivered the highest annual production volume in its history with production of 81,177 metric tons (t), surpassing the previous record set one year earlier.
“We are proud of and grateful for this achievement. It is clearly a result of hard work and devotion from all employees of the Company,” said Nico Kanter, CEO and President Director of the Company. “At the same time it is critical that we continue to improve our cost and production efficiencies as we remain cautious toward the nickel price in 2016.”
PT Vale’s nickel in matte production in the fourth quarter of 2015 (4Q15) was approximately 8% higher than the production volume in 4Q14. This represents the highest quarterly production volume in the history of PT Vale, even as the Company saw water levels fall at its hydro‐dams to near minimum levels toward the end of the year, impacting power supply. After a thorough examination, management of the. Company decided to activate thermal generators to supply additional power to the furnaces as the operation continued to generate positive cash margins. In early 2016, however, the water levels at our hydro‐dams began to improve significantly thanks to higher levels of rainfall. Consequently, the Company stopped operating thermal generators by mid‐January (2016).
Sales volume in 2015 increased by 4% over 2014 and by 12% quarter over quarter (4Q15 vs. 4Q14). However, the average selling price declined by 27% in 2015 over 2014 due to lower nickel prices, resulting in a revenue decrease of 24% for the year.
The cost of revenue for the Company declined by 8% in 2015 over 2014. The main drivers of the cost reduction were lower fuel and employment costs as well as improved monitoring of discretionary spending. Operating, finance and other costs also declined by 20%, 21% and 35% in 2015 over 2014, respectively. These all reflect continuous improvement in cost discipline and operating productivity at PT Vale and highlight the success of the Company’s cost reduction strategy.
Diesel consumption in 2015 increased significantly by 37% from 2014. This is attributable to the decision to switch on thermal generators to compensate for lower power production from the hydro‐dams as mentioned earlier. Diesel consumption increased by 79% in 4Q15 over the previous quarter. However, consumption and price of High Sulphur Fuel Oil (HSFO) decreased in 4Q15 compared to 3Q15, which helped offset the increase in diesel costs.
PT Vale’s HSFO and diesel fuel consumption in 4Q15, 3Q15, 2015 and 2014 are captured in the following table:
The table above also shows that HSFO consumption in 2015 increased by 5% from 2014, which is consistent with the increase in production. However, the HSFO cost incurred in 2015 was lower than in 2014 as the HSFO price declined significantly.
Profits for 2015 and 2014 were US$50.5 million and US$172.3 million, respectively.
The Company’s cash and cash equivalents as of December 31, 2015 and 2014 were US$194.8 million and US$302.3 million, respectively. PT Vale’s current assets as of December 31, 2015 also included the short‐term investments in the form of time deposits in the amount of US$90.1 million. PT Vale has been, and will continue to, prudently control its spending to preserve cash.
During the year, the Company disbursed approximately US$106.4 million in capital expenditures. That disbursement is in line with the capital expenditure guidance mentioned in the 3Q15 results release.
In 2016, PT Vale plans to produce approximately 80,000 t of nickel in matte. At the same time, the Company will maintain its focus on improving costs to sustain competitiveness in the long run without compromising the Company’s foremost value: Life Matters Most.
Readers are encouraged to review the Company’s results. Operational achievements and audited financial results are summarized on the following pages – all figures are in US$ except for nickel in matte production and deliveries which are in metric tons.
Click here to obtain the press releases
Click here to obtain PT Vale Indonesia Financial Statements 4Q15
For further information, please contact:
Febriany Eddy, Chief Financial Officer
PT Vale Indonesia Tbk
Plaza Bapindo, Citibank Tower 22nd fl,
Jl. Jend. Sudirman Kav. 54-55, Jakarta 12190, Indonesia
Tel: +62-21 5249000 Fax.: +62-21 5249010