PT Vale Indonesia (INCO) Q1 2024 earnings summary

Executive summary

• Achieved higher nickel in matte production in 1Q24 compared to the same quarter last year, targeting ~70,800 tons for 2024.

• Revenue for Q1 2024 was $229.9 million, down 37% year-over-year from $363.2 million in Q1 2023, with all sales to related parties under long-term contracts.

• Net profit for Q1 2024 was $6.2 million, a significant decrease from $168.7 million in Q1 2023, mainly due to lower nickel prices and a $12.9 million loss on derivative asset valuation.

• Maintained positive margins despite a significant drop in nickel prices and revenue year-over-year.

• Advanced three major growth projects with notable progress in Morowali, Pomalaa, and Sorowako.

Financial highlights

• EBITDA reached $52.4 million, a 70% decrease year-over-year and 47% lower sequentially.

• Gross profit for Q1 2024 was $20.1 million, down from $134.9 million in Q1 2023.

• Cash and cash equivalents plus restricted cash stood at $822 million as of March 31, 2024.

• Capex increased 13% year-over-year to $57.3 million.

• Total assets stood at $2.89 billion, with equity of $2.57 billion and total liabilities of $325.4 million as of March 31, 2024.

Outlook and guidance

• Production target for 2024 is approximately 70,800 tons of nickel in matte.

• In May 2024, the government issued a Special Mining Business License (IUPK), extending operational certainty and requiring completion of new processing facilities and a 10% profit-sharing obligation.

• Focus remains on safe, sustainable production and cost management amid volatile nickel prices.

• The company is progressing on major investment commitments in Sulawesi, including HPAL projects and joint ventures.

• A rights issue was launched in June 2024, offering up to 6.07% new shares to support growth.