PT International Nickel Indonesia (INCO), the second-best performing stock of the 45 most widely held shares on the Jakarta Stock Exchange, said first-quarter profit surged fivefold as higher nickel prices help boost sales.
Net income at the Southeast Asian country's largest nickel miner rose to $227.8 million, or 24 cents a share, from $43.6 million, or 4 cents a share, a year earlier, the Jakarta-based company said in a statement yesterday. The earnings were 27 percent of the mean $841.9 million profit forecast for 2007 by nine analysts compiled by Bloomberg.
PT Inco, as the company is known, is trying to boost output to benefit from record prices for nickel, which is used to make stainless steel. The metal for delivery in three months on the London Metal Exchange averaged $38,725 a ton in the quarter, compared with $14,940 a year earlier, as demand surged. Sales more than doubled to $446.7 million.
``It boils down to the nickel price,'' said Ahmad Solihin, an analyst at PT Mandiri Sekuritas, who has a ``buy'' rating on the stock. ``The earnings came mainly from higher prices,'' even though output likely fell in the March quarter from the previous three months ended Dec. 31.
The company will announce production details tomorrow, said Sri Kuncoro, director of corporate relations.
Nickel for delivery in three months rose 5 percent to $49,100 a metric ton on the London Metal Exchange yesterday and was recently at $49,650.
Shares in Inco, 60 percent owned by Brazil's Cia. Vale do Rio Doce, have almost doubled this year, compared with 9.8 percent rise in the LQ45 Index. (LQ45) The stock rose 4.5 percent to 63,400 rupiah in Jakarta.
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