PT Vale Indonesia (INCO) Q2 2024 earnings summary

Executive summary

• Achieved a positive EBITDA of $72.44 million in 2Q24, up 38% sequentially, despite a 16% year-over-year revenue decline due to lower nickel prices.

• Revenue for 1H24 was $478.8 million, down from $659.0 million year-over-year, reflecting lower sales volume or price.

• Net profit for 2Q24 reached $31.1 million, a 402% increase from 1Q24 but 20% lower than 2Q23; 1H24 net profit was $37.3 million, sharply down from $207.8 million year-over-year, mainly due to lower revenue and a $19.0 million derivative asset loss.

• Maintained strong safety performance with no recordable injuries in 2Q24, continuing a multi-year trend.

• Total assets increased to $3.07 billion as of June 30, 2024, driven by higher cash balances and ongoing capital projects.

Financial highlights

• 2Q24 revenue was $248.8 million, up 8% sequentially but down 16% year-over-year.

• Gross profit dropped to $61.6 million from $220.5 million year-over-year.

• Operating profit was $48.9 million, down from $192.9 million in the prior year.

• Average realized nickel price in 2Q24 was $14,214/MT, down 21% year-over-year but up 12% sequentially.

• Capex for 2Q24 totaled $61 million, with capital expenditures focused on major projects in Bahodopi, Pomalaa, and environmental initiatives.

Outlook and guidance

• Targeting annual production of approximately 70,800 tons of nickel in matte for 2024.

• Received a Special Mining Business License (IUPK) in May 2024, securing operational continuity and legal certainty for future growth.

• First ore delivery for Morowali Project expected in Q4 2024; Pomalaa Project in Q1 2026.

• Ongoing investment commitments in Sulawesi for new processing facilities and joint ventures.

• Obligated to complete new downstream facilities and comply with profit-sharing requirements under the IUPK.