Weak prices hurt Inco earnings

Lower third-quarter earnings reflect weaker nickel markets and increased unit production costs at its Canadian operations, Inco (TSE) said.

The nickel giant recorded third-quarter earnings of US$4.5 million compared with US$97 million for the same 3-month period in 1990. The results include a provision of US$18.8 million for the estimated costs associated with the voluntary early retirement incentive programs at the Sudbury area operations announced in September.

For the first nine months of 1991, Inco reported net earnings of US$88.4 million compared with US$368.6 million for the same period last year. Inco said cutbacks in production announced in September should reduce Canadian source nickel output by about 10 million lb. during the balance of 1991.

Net sales during the third quarter slipped to US$648 million from US$763 last year; net sales during the nine months rose slightly to US$2,296 million from $2,273 last year.

The company said increased unit production costs reflect higher employment costs, increased depreciation and amortization costs, and the depletion in 1990 of the low-cost Thompson open pit North mine in Manitoba. Inco said its average realized price of nickel (including intermediaries) for the first nine months of 1991 was US$3.94 per lb., compared with US$4.03 for the same period last year. For refined copper, it realized US$1.06 per lb. for the first nine months this year compared with US$1.17 last year. Total debt at Sept. 30 stood at US$1,246 million, while its debt-equity ratio was 42-to-58, Inco reported.