Inco Limited reports first quarter 2001 earnings of U.S.$85 million

(All dollar amounts are expressed in United States currency)



Apr 24, 2001, 01:00 ET from Inco Limited

    TORONTO, April 24 /PRNewswire/ - Inco Limited reported net earnings of
 $85 million, or 43 cents per common share (42 cents per share on a diluted
 basis), for the first quarter of 2001, compared with $101 million, or 52 cents
 per share (48 cents per share on a diluted basis), for the first quarter of
 2000.
     "Our first quarter 2001 financial performance clearly demonstrates that
 we are continuing to achieve satisfactory results in an uncertain economic
 environment," said Inco Chairman and Chief Executive Officer Mike Sopko. "For
 the most part, to date we are on track or ahead of our internal targets for
 2001 and that's very gratifying," he added.
     The following table summarizes the Company's results for the periods
 indicated:
 
     ------------------------------------------------------------------------
     Results Summary                            First        First
                                               Quarter      Quarter
                                                2001         2000
                                                          (Restated)
     ------------------------------------------------------------------------
 
     (in millions except
         per share amounts)
 
     Net sales                                 $    586    $    774
     Operating earnings                             145         198
     Net earnings                                    85         101
     Net earnings
      per common share
         - basic                                   0.43        0.52
         - diluted                                 0.42        0.48
     Cash provided by (used for)
      operating activities                           (8)         72
 
     Results for the first quarter of 2001, compared with the corresponding
 2000 period, reflected significantly lower average realized prices for nickel
 and higher nickel unit cash cost of sales, partially offset by higher realized
 prices for platinum-group metals and increased deliveries of Inco-source
 nickel. First quarter 2001 results also reflected the benefit of favourable
 non-cash currency translation adjustments of $34 million, which were due to a
 weakening of the Canadian dollar relative to the U.S. dollar.
 
     Prices and Deliveries
 
     The following tables show the Company's average realized prices for
 nickel and copper and the London Metal Exchange ("LME") average cash prices
 for nickel and copper for the periods indicated:
 
                                                First        First
                                               Quarter      Quarter
     Inco Average Realized Prices               2001         2000
     ------------------------------------------------------------------------
 
     Nickel (1)     - per tonne              $    7,217    $    9,352
                    - per pound                    3.27          4.24
 
     Copper         - per tonne                   1,867         1,852
                    - per pound                    0.85          0.84
 
     (1) Including intermediates
 
                                                First        First
                                               Quarter      Quarter
     LME Average Cash Prices                    2001         2000
     ------------------------------------------------------------------------
 
     Nickel         - per tonne              $    6,555    $    9,419
                    - per pound                    2.97          4.27
 
     Copper         - per tonne                   1,764         1,795
                    - per pound                    0.80          0.81
 
     The Company's deliveries of primary metals for the periods indicated are
     shown below:
                                                First        First
                                               Quarter      Quarter
     Deliveries                                 2001         2000
     ------------------                     ------------  -----------
 
     Nickel in all forms (tonnes)
 
                    - Inco-source                51,384        48,390
                    - Purchased                   7,393        18,308
                                             -----------   -----------
                                                 58,777        66,698
                                             -----------   -----------
     Copper (tonnes)                             29,945        34,527
                                             -----------   -----------
     Cobalt (tonnes)                                434           389
                                             -----------   -----------
 
                                                      (in thousands)
     Platinum-group metals
         (troy ounces)                               93            89
                                              ----------    ----------
     Gold (troy ounces)                              20            20
                                              ----------    ----------
     Silver (troy ounces)                           380           350
                                              ----------    ----------
 
 
     While Inco-source nickel deliveries increased by six per cent, total
 nickel deliveries declined 12 per cent in the first quarter of 2001, compared
 with the corresponding 2000 period, primarily reflecting weaker demand in the
 United States and Japan as a result of an economic slowdown in those
 countries.
 
     Production Data and Operating Expenses
 
     The following table sets forth production data for nickel, nickel unit
 cash cost of sales both before and after by-product credits for the periods
 indicated, and finished nickel inventories as of the end of the periods
 indicated:
 
 
                                                First        First
                                               Quarter      Quarter
     Production Data                            2001         2000
                                                          (Restated)
     ---------------------------             -----------  -----------
 
     Nickel in all forms (tonnes)                52,585        52,511
                                             ------------ -----------
 
     Nickel unit cash cost of
      sales before by-product
      credits
                    - per tonne              $    3,549    $    2,932
                    - per pound                    1.61          1.33
 
     Nickel unit cash cost of
      sales after by-product
      credits
                    - per tonne              $    2,822    $    2,491
                    - per pound                    1.28          1.13
 
     Finished nickel inventories
      at end of period (tonnes)                  26,200        32,535
                                            ------------   -----------
 
 
     The increase in nickel unit cash cost of sales before by-product credits
 in the first quarter of 2001, compared with the corresponding quarter of 2000,
 was principally due to higher energy costs and the impact of processing higher
 volumes of purchased intermediates. The increase in nickel unit cash cost of
 sales after by-product credits in the first quarter of 2001, compared with the
 first quarter of 2000, was primarily due to these same factors, partially
 offset by higher realized prices for platinum-group metals.
 
     Operating Earnings
 
     Operating earnings (loss) for the Company's principal operations were as
 follows for the periods indicated:
 
                                                First        First
                                               Quarter      Quarter
                                                2001         2000
                                                          (Restated)
                                            ------------  ------------
                                                  (in millions)
 
     Ontario Division                        $       81     $    127
     Manitoba Division                               28           43
     PT International Nickel Indonesia Tbk           21           35
     Corporate and other                             15           (7)
                                             -----------    ---------
                                             $      145     $    198
                                             -----------    ---------
                                             -----------    ---------
 
 
     Operating results comprise earnings or loss before income and mining
 taxes, interest expense, other expenses or income, and minority interest.
 
     Cash Flows
 
     Cash flow generated from the Company's operating activities before
 changes in working capital was $130 million in the first quarter of 2001,
 compared with $166 million in the corresponding 2000 period. This decrease was
 primarily due to lower operating earnings. Cash used for operating activities
 (after changes in working capital) in the first quarter of 2001 was $8
 million, compared with cash provided by operating activities of $72 million in
 the corresponding quarter of 2000. The lower cash flows in the first quarter
 of 2001 reflected lower operating earnings and a reduction in income and
 mining taxes payable resulting from tax payments of $163 million for the
 balance of taxes owing in respect of 2000 and instalments for the first
 quarter of 2001.
     Capital expenditures were $44 million in the first quarter of 2001,
 compared with $37 million in the first quarter of 2000. This increase was
 primarily due to higher spending on the Goro project feasibility study.
     As previously announced, the Company completed on March 29, 2001 the
 issuance and sale, on a bought deal basis, of $230 million in total gross
 proceeds to Inco of its 20-year zero-coupon convertible notes due 2021 ("LYON
 Notes"). The Company intends to use the net proceeds of $226 million, after
 commissions and other expenses, from this offering to repay fixed rate debt
 and for general corporate purposes, including capital expenditures for its
 Goro and other development projects. Under Canadian generally accepted
 accounting principles, the LYON Notes are classified as equity and not debt.
 The LYON Notes will not be dilutive for purposes of calculating the Company's
 diluted earnings per share.
 
     Financial Position
 
     The Company's total debt was $995 million at March 31, 2001, down from
 $1,030 million at December 31, 2000. At March 31, 2001, the Company's cash and
 marketable securities were $332 million, up from $193 million at December 31,
 2000, reflecting the net proceeds received from the sale of the LYON Notes.
 The Company's net debt as a percentage of net debt plus shareholders' equity
 was 12 per cent at March 31, 2001, compared with 15 per cent at December 31,
 2000, reflecting the reduction in debt and higher cash and marketable
 securities and shareholders' equity at March 31, 2001.
     At March 31, 2001, the number of the Company's common shares issued and
 outstanding was 181,997,763.
 
     Accounting Changes
 
     Effective January 1, 2001, the Company adopted, retroactively as a change
 in accounting policy, a new accounting standard of the Canadian Institute of
 Chartered Accountants ("CICA") in respect of earnings per share. This new
 standard changes the method in which diluted earnings per share are
 calculated. The effect of adopting this new standard was to increase diluted
 earnings per share by one cent in the first quarter of 2000.
     Also effective January 1, 2001, the Company adopted, retroactively, a new
 accounting standard of the CICA in respect of interim financial statements. As
 a consequence, the Company changed its accounting policy, for interim
 reporting purposes only, in connection with the timing of recognizing the
 costs associated with its planned annual shutdown of operations for
 maintenance. Previously, these costs were expensed evenly over the year
 whereas under the new standard such costs are expensed in the period in which
 they are incurred. The effect of adopting this new standard was to increase
 net earnings by $6 million, or three cents per share, in the first quarter of
 2000. Certain 2000 comparative figures have been restated in connection with
 the retroactive adoption of this new accounting standard.
 
     Dividends
 
     The Board of Directors today declared a dividend of $0.6875 per share in
 respect of the Company's 5.5% Convertible Redeemable Preferred Shares Series
 E, payable June 1, for the quarter ending May 31, 2001, to shareholders of
 record on May 7.
 
     Outlook
 
     The Company's current estimates for its production for the second quarter
 of 2001 and the full year 2001 of nickel, copper and platinum-group metals
 (PGMs), including PGMs produced from purchased material, are as follows,
 taking into account actual production levels for the first quarter of 2001,
 and are essentially unchanged for the full year 2001 from the guidance
 provided on February 6, 2001:
 
 
                                         Second Quarter    Full Year
                                              2001            2001
                                       -------------------------------
 
     Nickel      -  tonnes (thousands)          54             209
                 -  pounds (millions)          120             460
 
     Copper      -  tonnes (thousands)          34             125
                 -  pounds (millions)           75             275
 
     PGMs        -  troy ounces (thousands)    125             416
 
 
     The Company's nickel unit cash costs of sales after by-product credits,
 and the premium it expects to realize over LME cash nickel prices, for the
 second quarter of 2001 and the full year 2001 are currently projected to be
 $1.25 to $1.30 per pound ($2,756 to $2,866 per tonne) and $0.15 to $0.20 per
 pound ($331 to $441 per tonne), respectively. As reflected in the table above,
 the Company has historically experienced, and expects to continue to
 experience, some quarter-to-quarter variability in production levels of its
 primary metals products due to planned summer shutdowns of operations and
 other normal planned actions.
     "Based upon the current consensus for the average LME cash nickel price
 for 2001 assumed by analysts in their earnings estimates, which we understand
 is approximately $3.14 per pound, and their consensus prices for 2001 for
 Inco's other metals products, we are comfortable, taking into full account our
 actual results for the first quarter of 2001, with the current First Call
 consensus estimate for 2001 for Inco's net earnings per common share, on a
 diluted basis, of $1.39", stated George Halatsis, Inco's Executive Vice-
 President and Chief Financial Officer. "Our policy continues to be that we do
 not publicly forecast where nickel and other metals prices will be given the
 historic volatility in these prices and the high level of economic uncertainty
 that currently exists in many of our key geographic markets," he added. The
 LME cash nickel price averaged $2.95 per pound ($6,507 per tonne) for the
 January 2 - April 24, 2001 period.
     In terms of the current sensitivity of the Company's earnings per common
 share to changes in nickel prices, Mr. Halatsis noted that: "For every change
 of 10 cents, up or down, per pound in Inco's realized nickel price over a full
 year, Inco's earnings per common share over that year would change, up or
 down, by about 15 cents." As reflected in the table below, while Inco's
 financial results are most sensitive to movements in nickel prices, they are
 also sensitive to changes in copper and other prices as well as, on the cost
 side, changes in oil prices and in the Canadian-U.S. dollar exchange rate
 given that a substantial portion of expenses are incurred in Canadian dollars
 and the Company has substantial Canadian dollar denominated liabilities:
 
 
           CURRENT 2001 SENSITIVITY OF EPS(1) TO CERTAIN
                   METALS PRICES AND OTHER CHANGES
                       OVER ONE YEAR (IN U.S.$)
 
                                         Amount of Change
                                           (up or down)      EPS Effect(1)
                                         ----------------    -------------
 
         Realized Nickel Price             $    0.10/lb.       $    0.15
         Realized Copper Price                  0.10/lb.            0.09
         Realized Palladium Price              50.00/troy oz        0.02
         Realized Platinum Price               50.00/troy oz        0.02
         Cdn.-U.S. Exchange Rate                0.01                0.07
         Oil Price (West Texas
          Intermediate)                         1.00/bbl           0.006
 
     (1) Inco's basic earnings per common share
 
 
     This news release contains forward-looking statements regarding the
 Company's nickel, copper and precious metals production levels and costs, its
 position as a low-cost producer of nickel, premiums realized on its metals
 prices, sensitivity of financial results to changes in metals prices and
 exchange rates and other costs, and other issues and aspects relating to its
 business and operations. Inherent in those statements are known and unknown
 risks, uncertainties and other factors well beyond the Company's ability to
 control or predict. Actual results and developments may differ materially from
 those contemplated by these statements depending on, among others, such key
 factors as business and economic conditions in the principal markets for the
 Company's products, the supply and demand for metals to be produced,
 deliveries, production levels, production and other anticipated and
 unanticipated costs and expenses, metals prices, premiums realized over London
 Metal Exchange cash and other benchmark prices, tax benefits, the Canadian-
 U.S. dollar and other exchange rates, the timing of the development of, and
 capital costs and financing arrangements associated with, the Goro and other
 projects, the timing of the receipt of governmental and other approvals,
 political unrest or instability in countries such as Indonesia, risks involved
 in mining, processing and exploration activities, market competition and
 labour relations and other risk factors listed from time to time in the
 Company's reports filed with the U.S. Securities and Exchange Commission.
 
 
                                   XXXXXXXXX
 
     Unaudited Condensed Consolidated Financial Statements Are Attached.
 
     IN 15/01
     April 24, 2001
 
 
                                 INCO LIMITED
                            ----------------------
                          (U.S. dollars in millions)
           CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)
     ------------------------------------------------------------------------
 
 
                                                          First Quarter
                                                        2001         2000
                                                                  (Restated)
                                                      ------------------------
 
     Net sales                                        $   586      $   774
                                                     -------------------------
 
     Costs and operating expenses (income)
 
     Cost of sales and operating expenses                 371          474
     Depreciation and depletion                            67           68
     Selling, general and administrative                   26           23
     Research and development                               5            5
     Exploration                                            6            6
     Currency translation adjustments                     (34)           -
                                                      ------------------------
                                                          441          576
                                                      ------------------------
 
     Operating earnings                                   145          198
     Interest expense                                      17           24
     Other expenses (income)                                1           (8)
                                                      ------------------------
     Earnings before taxes and minority interest          127          182
     Income and mining taxes                               38           71
                                                      ------------------------
     Earnings before minority interest                     89          111
     Minority interest                                      4           10
                                                      ------------------------
 
     Net earnings                                          85          101
     Dividends on preferred shares                         (6)          (6)
                                                      ------------------------
 
     Net earnings applicable to common shares         $    79      $    95
                                                      ------------------------
                                                      ------------------------
 
     Net earnings per common share
 
       Basic                                          $  0.43      $  0.52
                                                      ------------------------
                                                      ------------------------
 
       Diluted                                        $  0.42      $  0.48
                                                      ------------------------
                                                      ------------------------
 
     Common shares outstanding (weighted average,
      in thousands)
 
       Basic                                          181,866      181,675
                                                      ------------------------
                                                      ------------------------
 
       Diluted                                        188,577      205,380
                                                      ------------------------
                                                      ------------------------
 
 
                                 INCO LIMITED
                            ----------------------
                          (U.S. dollars in millions)
 
               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
     -------------------------------------------------------------------------
 
                                                     March 31,    December 31,
                                                       2001          2000
                                                    --------------------------
 
     Assets
 
     Cash and marketable securities                   $   332      $   193
     Accounts receivable                                  283          310
     Inventories                                          525          520
     Other current assets                                  40           33
                                                      ---------    ---------
 
       Total current assets                             1,180        1,056
 
     Capital assets                                     8,220        8,352
     Other assets                                         263          268
                                                      ---------    ---------
 
                                                      $ 9,663      $ 9,676
                                                      ---------    ---------
                                                      ---------    ---------
 
     Liabilities and shareholders' equity
 
     Long-term debt due within one year               $    77      $    78
     Accounts payable and accrued liabilities             408          428
     Income and mining taxes payable                       52          185
                                                      ---------    ---------
 
         Total current liabilities                        537          691
 
     Long-term debt                                       918          952
     Deferred taxes                                     2,284        2,401
     Post-retirement benefits                             451          469
     Future removal and site restoration costs             48           47
     Minority interest                                    336          334
     Shareholders' equity                               5,089        4,782
                                                      ---------    ---------
 
                                                      $ 9,663      $ 9,676
                                                      ---------    ---------
                                                      ---------    ---------
 
 
 
                                 INCO LIMITED
                            ----------------------
                          (U.S. dollars in millions)
 
          CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
     -------------------------------------------------------------------------
 
                                                          First Quarter
                                                        2001         2000
                                                                  (Restated)
                                                      ------------------------
     Operating activities
 
       Earnings before minority interest              $    89      $   111
       Charges (credits) not affecting cash
         Depreciation and depletion                        67           68
         Deferred income and mining taxes                  (4)          15
         Other                                            (22)         (28)
       Increase in non-cash working capital related
        to operations                                    (138)         (94)
                                                      ------------------------
                                                           (8)          72
                                                      ------------------------
     Investing activities
 
       Capital expenditures                               (44)         (37)
       Other                                                5            2
                                                      ------------------------
                                                          (39)         (35)
                                                      ------------------------
 
     Financing activities
 
       Net decrease in borrowings                         (35)         (23)
       Convertible notes issued                           226            -
       Common shares issued                                 2            2
       Preferred dividends paid                            (6)          (6)
       Other                                               (1)          (1)
                                                      ------------------------
                                                          186          (28)
                                                      ------------------------
 
     Increase in cash and marketable securities           139            9
     Cash and marketable securities at beginning of
      period                                              193           38
                                                      ------------------------
 
     Cash and marketable securities at end of
      period                                          $   332      $    47
                                                      ------------------------
                                                      ------------------------
 
 
 

SOURCE Inco Limited
    TORONTO, April 24 /PRNewswire/ - Inco Limited reported net earnings of
 $85 million, or 43 cents per common share (42 cents per share on a diluted
 basis), for the first quarter of 2001, compared with $101 million, or 52 cents
 per share (48 cents per share on a diluted basis), for the first quarter of
 2000.
     "Our first quarter 2001 financial performance clearly demonstrates that
 we are continuing to achieve satisfactory results in an uncertain economic
 environment," said Inco Chairman and Chief Executive Officer Mike Sopko. "For
 the most part, to date we are on track or ahead of our internal targets for
 2001 and that's very gratifying," he added.
     The following table summarizes the Company's results for the periods
 indicated:
 
     ------------------------------------------------------------------------
     Results Summary                            First        First
                                               Quarter      Quarter
                                                2001         2000
                                                          (Restated)
     ------------------------------------------------------------------------
 
     (in millions except
         per share amounts)
 
     Net sales                                 $    586    $    774
     Operating earnings                             145         198
     Net earnings                                    85         101
     Net earnings
      per common share
         - basic                                   0.43        0.52
         - diluted                                 0.42        0.48
     Cash provided by (used for)
      operating activities                           (8)         72
 
     Results for the first quarter of 2001, compared with the corresponding
 2000 period, reflected significantly lower average realized prices for nickel
 and higher nickel unit cash cost of sales, partially offset by higher realized
 prices for platinum-group metals and increased deliveries of Inco-source
 nickel. First quarter 2001 results also reflected the benefit of favourable
 non-cash currency translation adjustments of $34 million, which were due to a
 weakening of the Canadian dollar relative to the U.S. dollar.
 
     Prices and Deliveries
 
     The following tables show the Company's average realized prices for
 nickel and copper and the London Metal Exchange ("LME") average cash prices
 for nickel and copper for the periods indicated:
 
                                                First        First
                                               Quarter      Quarter
     Inco Average Realized Prices               2001         2000
     ------------------------------------------------------------------------
 
     Nickel (1)     - per tonne              $    7,217    $    9,352
                    - per pound                    3.27          4.24
 
     Copper         - per tonne                   1,867         1,852
                    - per pound                    0.85          0.84
 
     (1) Including intermediates
 
                                                First        First
                                               Quarter      Quarter
     LME Average Cash Prices                    2001         2000
     ------------------------------------------------------------------------
 
     Nickel         - per tonne              $    6,555    $    9,419
                    - per pound                    2.97          4.27
 
     Copper         - per tonne                   1,764         1,795
                    - per pound                    0.80          0.81
 
     The Company's deliveries of primary metals for the periods indicated are
     shown below:
                                                First        First
                                               Quarter      Quarter
     Deliveries                                 2001         2000
     ------------------                     ------------  -----------
 
     Nickel in all forms (tonnes)
 
                    - Inco-source                51,384        48,390
                    - Purchased                   7,393        18,308
                                             -----------   -----------
                                                 58,777        66,698
                                             -----------   -----------
     Copper (tonnes)                             29,945        34,527
                                             -----------   -----------
     Cobalt (tonnes)                                434           389
                                             -----------   -----------
 
                                                      (in thousands)
     Platinum-group metals
         (troy ounces)                               93            89
                                              ----------    ----------
     Gold (troy ounces)                              20            20
                                              ----------    ----------
     Silver (troy ounces)                           380           350
                                              ----------    ----------
 
 
     While Inco-source nickel deliveries increased by six per cent, total
 nickel deliveries declined 12 per cent in the first quarter of 2001, compared
 with the corresponding 2000 period, primarily reflecting weaker demand in the
 United States and Japan as a result of an economic slowdown in those
 countries.
 
     Production Data and Operating Expenses
 
     The following table sets forth production data for nickel, nickel unit
 cash cost of sales both before and after by-product credits for the periods
 indicated, and finished nickel inventories as of the end of the periods
 indicated:
 
 
                                                First        First
                                               Quarter      Quarter
     Production Data                            2001         2000
                                                          (Restated)
     ---------------------------             -----------  -----------
 
     Nickel in all forms (tonnes)                52,585        52,511
                                             ------------ -----------
 
     Nickel unit cash cost of
      sales before by-product
      credits
                    - per tonne              $    3,549    $    2,932
                    - per pound                    1.61          1.33
 
     Nickel unit cash cost of
      sales after by-product
      credits
                    - per tonne              $    2,822    $    2,491
                    - per pound                    1.28          1.13
 
     Finished nickel inventories
      at end of period (tonnes)                  26,200        32,535
                                            ------------   -----------
 
 
     The increase in nickel unit cash cost of sales before by-product credits
 in the first quarter of 2001, compared with the corresponding quarter of 2000,
 was principally due to higher energy costs and the impact of processing higher
 volumes of purchased intermediates. The increase in nickel unit cash cost of
 sales after by-product credits in the first quarter of 2001, compared with the
 first quarter of 2000, was primarily due to these same factors, partially
 offset by higher realized prices for platinum-group metals.
 
     Operating Earnings
 
     Operating earnings (loss) for the Company's principal operations were as
 follows for the periods indicated:
 
                                                First        First
                                               Quarter      Quarter
                                                2001         2000
                                                          (Restated)
                                            ------------  ------------
                                                  (in millions)
 
     Ontario Division                        $       81     $    127
     Manitoba Division                               28           43
     PT International Nickel Indonesia Tbk           21           35
     Corporate and other                             15           (7)
                                             -----------    ---------
                                             $      145     $    198
                                             -----------    ---------
                                             -----------    ---------
 
 
     Operating results comprise earnings or loss before income and mining
 taxes, interest expense, other expenses or income, and minority interest.
 
     Cash Flows
 
     Cash flow generated from the Company's operating activities before
 changes in working capital was $130 million in the first quarter of 2001,
 compared with $166 million in the corresponding 2000 period. This decrease was
 primarily due to lower operating earnings. Cash used for operating activities
 (after changes in working capital) in the first quarter of 2001 was $8
 million, compared with cash provided by operating activities of $72 million in
 the corresponding quarter of 2000. The lower cash flows in the first quarter
 of 2001 reflected lower operating earnings and a reduction in income and
 mining taxes payable resulting from tax payments of $163 million for the
 balance of taxes owing in respect of 2000 and instalments for the first
 quarter of 2001.
     Capital expenditures were $44 million in the first quarter of 2001,
 compared with $37 million in the first quarter of 2000. This increase was
 primarily due to higher spending on the Goro project feasibility study.
     As previously announced, the Company completed on March 29, 2001 the
 issuance and sale, on a bought deal basis, of $230 million in total gross
 proceeds to Inco of its 20-year zero-coupon convertible notes due 2021 ("LYON
 Notes"). The Company intends to use the net proceeds of $226 million, after
 commissions and other expenses, from this offering to repay fixed rate debt
 and for general corporate purposes, including capital expenditures for its
 Goro and other development projects. Under Canadian generally accepted
 accounting principles, the LYON Notes are classified as equity and not debt.
 The LYON Notes will not be dilutive for purposes of calculating the Company's
 diluted earnings per share.
 
     Financial Position
 
     The Company's total debt was $995 million at March 31, 2001, down from
 $1,030 million at December 31, 2000. At March 31, 2001, the Company's cash and
 marketable securities were $332 million, up from $193 million at December 31,
 2000, reflecting the net proceeds received from the sale of the LYON Notes.
 The Company's net debt as a percentage of net debt plus shareholders' equity
 was 12 per cent at March 31, 2001, compared with 15 per cent at December 31,
 2000, reflecting the reduction in debt and higher cash and marketable
 securities and shareholders' equity at March 31, 2001.
     At March 31, 2001, the number of the Company's common shares issued and
 outstanding was 181,997,763.
 
     Accounting Changes
 
     Effective January 1, 2001, the Company adopted, retroactively as a change
 in accounting policy, a new accounting standard of the Canadian Institute of
 Chartered Accountants ("CICA") in respect of earnings per share. This new
 standard changes the method in which diluted earnings per share are
 calculated. The effect of adopting this new standard was to increase diluted
 earnings per share by one cent in the first quarter of 2000.
     Also effective January 1, 2001, the Company adopted, retroactively, a new
 accounting standard of the CICA in respect of interim financial statements. As
 a consequence, the Company changed its accounting policy, for interim
 reporting purposes only, in connection with the timing of recognizing the
 costs associated with its planned annual shutdown of operations for
 maintenance. Previously, these costs were expensed evenly over the year
 whereas under the new standard such costs are expensed in the period in which
 they are incurred. The effect of adopting this new standard was to increase
 net earnings by $6 million, or three cents per share, in the first quarter of
 2000. Certain 2000 comparative figures have been restated in connection with
 the retroactive adoption of this new accounting standard.
 
     Dividends
 
     The Board of Directors today declared a dividend of $0.6875 per share in
 respect of the Company's 5.5% Convertible Redeemable Preferred Shares Series
 E, payable June 1, for the quarter ending May 31, 2001, to shareholders of
 record on May 7.
 
     Outlook
 
     The Company's current estimates for its production for the second quarter
 of 2001 and the full year 2001 of nickel, copper and platinum-group metals
 (PGMs), including PGMs produced from purchased material, are as follows,
 taking into account actual production levels for the first quarter of 2001,
 and are essentially unchanged for the full year 2001 from the guidance
 provided on February 6, 2001:
 
 
                                         Second Quarter    Full Year
                                              2001            2001
                                       -------------------------------
 
     Nickel      -  tonnes (thousands)          54             209
                 -  pounds (millions)          120             460
 
     Copper      -  tonnes (thousands)          34             125
                 -  pounds (millions)           75             275
 
     PGMs        -  troy ounces (thousands)    125             416
 
 
     The Company's nickel unit cash costs of sales after by-product credits,
 and the premium it expects to realize over LME cash nickel prices, for the
 second quarter of 2001 and the full year 2001 are currently projected to be
 $1.25 to $1.30 per pound ($2,756 to $2,866 per tonne) and $0.15 to $0.20 per
 pound ($331 to $441 per tonne), respectively. As reflected in the table above,
 the Company has historically experienced, and expects to continue to
 experience, some quarter-to-quarter variability in production levels of its
 primary metals products due to planned summer shutdowns of operations and
 other normal planned actions.
     "Based upon the current consensus for the average LME cash nickel price
 for 2001 assumed by analysts in their earnings estimates, which we understand
 is approximately $3.14 per pound, and their consensus prices for 2001 for
 Inco's other metals products, we are comfortable, taking into full account our
 actual results for the first quarter of 2001, with the current First Call
 consensus estimate for 2001 for Inco's net earnings per common share, on a
 diluted basis, of $1.39", stated George Halatsis, Inco's Executive Vice-
 President and Chief Financial Officer. "Our policy continues to be that we do
 not publicly forecast where nickel and other metals prices will be given the
 historic volatility in these prices and the high level of economic uncertainty
 that currently exists in many of our key geographic markets," he added. The
 LME cash nickel price averaged $2.95 per pound ($6,507 per tonne) for the
 January 2 - April 24, 2001 period.
     In terms of the current sensitivity of the Company's earnings per common
 share to changes in nickel prices, Mr. Halatsis noted that: "For every change
 of 10 cents, up or down, per pound in Inco's realized nickel price over a full
 year, Inco's earnings per common share over that year would change, up or
 down, by about 15 cents." As reflected in the table below, while Inco's
 financial results are most sensitive to movements in nickel prices, they are
 also sensitive to changes in copper and other prices as well as, on the cost
 side, changes in oil prices and in the Canadian-U.S. dollar exchange rate
 given that a substantial portion of expenses are incurred in Canadian dollars
 and the Company has substantial Canadian dollar denominated liabilities:
 
 
           CURRENT 2001 SENSITIVITY OF EPS(1) TO CERTAIN
                   METALS PRICES AND OTHER CHANGES
                       OVER ONE YEAR (IN U.S.$)
 
                                         Amount of Change
                                           (up or down)      EPS Effect(1)
                                         ----------------    -------------
 
         Realized Nickel Price             $    0.10/lb.       $    0.15
         Realized Copper Price                  0.10/lb.            0.09
         Realized Palladium Price              50.00/troy oz        0.02
         Realized Platinum Price               50.00/troy oz        0.02
         Cdn.-U.S. Exchange Rate                0.01                0.07
         Oil Price (West Texas
          Intermediate)                         1.00/bbl           0.006
 
     (1) Inco's basic earnings per common share
 
 
     This news release contains forward-looking statements regarding the
 Company's nickel, copper and precious metals production levels and costs, its
 position as a low-cost producer of nickel, premiums realized on its metals
 prices, sensitivity of financial results to changes in metals prices and
 exchange rates and other costs, and other issues and aspects relating to its
 business and operations. Inherent in those statements are known and unknown
 risks, uncertainties and other factors well beyond the Company's ability to
 control or predict. Actual results and developments may differ materially from
 those contemplated by these statements depending on, among others, such key
 factors as business and economic conditions in the principal markets for the
 Company's products, the supply and demand for metals to be produced,
 deliveries, production levels, production and other anticipated and
 unanticipated costs and expenses, metals prices, premiums realized over London
 Metal Exchange cash and other benchmark prices, tax benefits, the Canadian-
 U.S. dollar and other exchange rates, the timing of the development of, and
 capital costs and financing arrangements associated with, the Goro and other
 projects, the timing of the receipt of governmental and other approvals,
 political unrest or instability in countries such as Indonesia, risks involved
 in mining, processing and exploration activities, market competition and
 labour relations and other risk factors listed from time to time in the
 Company's reports filed with the U.S. Securities and Exchange Commission.
 
 
                                   XXXXXXXXX
 
     Unaudited Condensed Consolidated Financial Statements Are Attached.
 
     IN 15/01
     April 24, 2001
 
 
                                 INCO LIMITED
                            ----------------------
                          (U.S. dollars in millions)
           CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)
     ------------------------------------------------------------------------
 
 
                                                          First Quarter
                                                        2001         2000
                                                                  (Restated)
                                                      ------------------------
 
     Net sales                                        $   586      $   774
                                                     -------------------------
 
     Costs and operating expenses (income)
 
     Cost of sales and operating expenses                 371          474
     Depreciation and depletion                            67           68
     Selling, general and administrative                   26           23
     Research and development                               5            5
     Exploration                                            6            6
     Currency translation adjustments                     (34)           -
                                                      ------------------------
                                                          441          576
                                                      ------------------------
 
     Operating earnings                                   145          198
     Interest expense                                      17           24
     Other expenses (income)                                1           (8)
                                                      ------------------------
     Earnings before taxes and minority interest          127          182
     Income and mining taxes                               38           71
                                                      ------------------------
     Earnings before minority interest                     89          111
     Minority interest                                      4           10
                                                      ------------------------
 
     Net earnings                                          85          101
     Dividends on preferred shares                         (6)          (6)
                                                      ------------------------
 
     Net earnings applicable to common shares         $    79      $    95
                                                      ------------------------
                                                      ------------------------
 
     Net earnings per common share
 
       Basic                                          $  0.43      $  0.52
                                                      ------------------------
                                                      ------------------------
 
       Diluted                                        $  0.42      $  0.48
                                                      ------------------------
                                                      ------------------------
 
     Common shares outstanding (weighted average,
      in thousands)
 
       Basic                                          181,866      181,675
                                                      ------------------------
                                                      ------------------------
 
       Diluted                                        188,577      205,380
                                                      ------------------------
                                                      ------------------------
 
 
                                 INCO LIMITED
                            ----------------------
                          (U.S. dollars in millions)
 
               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
     -------------------------------------------------------------------------
 
                                                     March 31,    December 31,
                                                       2001          2000
                                                    --------------------------
 
     Assets
 
     Cash and marketable securities                   $   332      $   193
     Accounts receivable                                  283          310
     Inventories                                          525          520
     Other current assets                                  40           33
                                                      ---------    ---------
 
       Total current assets                             1,180        1,056
 
     Capital assets                                     8,220        8,352
     Other assets                                         263          268
                                                      ---------    ---------
 
                                                      $ 9,663      $ 9,676
                                                      ---------    ---------
                                                      ---------    ---------
 
     Liabilities and shareholders' equity
 
     Long-term debt due within one year               $    77      $    78
     Accounts payable and accrued liabilities             408          428
     Income and mining taxes payable                       52          185
                                                      ---------    ---------
 
         Total current liabilities                        537          691
 
     Long-term debt                                       918          952
     Deferred taxes                                     2,284        2,401
     Post-retirement benefits                             451          469
     Future removal and site restoration costs             48           47
     Minority interest                                    336          334
     Shareholders' equity                               5,089        4,782
                                                      ---------    ---------
 
                                                      $ 9,663      $ 9,676
                                                      ---------    ---------
                                                      ---------    ---------
 
 
 
                                 INCO LIMITED
                            ----------------------
                          (U.S. dollars in millions)
 
          CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
     -------------------------------------------------------------------------
 
                                                          First Quarter
                                                        2001         2000
                                                                  (Restated)
                                                      ------------------------
     Operating activities
 
       Earnings before minority interest              $    89      $   111
       Charges (credits) not affecting cash
         Depreciation and depletion                        67           68
         Deferred income and mining taxes                  (4)          15
         Other                                            (22)         (28)
       Increase in non-cash working capital related
        to operations                                    (138)         (94)
                                                      ------------------------
                                                           (8)          72
                                                      ------------------------
     Investing activities
 
       Capital expenditures                               (44)         (37)
       Other                                                5            2
                                                      ------------------------
                                                          (39)         (35)
                                                      ------------------------
 
     Financing activities
 
       Net decrease in borrowings                         (35)         (23)
       Convertible notes issued                           226            -
       Common shares issued                                 2            2
       Preferred dividends paid                            (6)          (6)
       Other                                               (1)          (1)
                                                      ------------------------
                                                          186          (28)
                                                      ------------------------
 
     Increase in cash and marketable securities           139            9
     Cash and marketable securities at beginning of
      period                                              193           38
                                                      ------------------------
 
     Cash and marketable securities at end of
      period                                          $   332      $    47
                                                      ------------------------
                                                      ------------------------
 
 
 SOURCE Inco Limited