Nickel Asia income up 4-fold in 2014

MANILA, Philippines - Net earnings of listed miner Nickel Asia Corp. rose 316 percent in 2014 on improved ore prices and higher shipment volume.

In an exchange filing yesterday, the company said its net income reached P8.55 billion in 2014, up more then four-fold from P2.05 billion in 2013.

Total revenues stood at P24.7 billion compared to P11.1 billion in 2013. Earnings before interest, tax, depreciation and amortization (EBITDA) rose 218 percent to P15.84 billion from P4.99 billion the previous year.

The company said the strong performance in 2014 was due to the combined effects of higher ore prices and record shipments of ore.

Shipment volumes in 2014 increased 28 percent to 17.9 million wet metric tons (WMT) from 14 million WMT in 2013. Sales of limonite ore amounted to 12.1 million WMT compared to 10.4 million WMT in 2013, while sales of saprolite ore was 5.8 million WMT as against 3.6 million WMT the prior year.

The increase in volume was mainly the result of higher ore deliveries to the company’s Taganito HPAL plant, which went on its first full year of commercial operations in 2014.

Consequently, shipments of low-grade limonite ore to the plant from the company’s 65 percent-owned subsidiary, Taganito Mining Corp., increased from 0.87 million WMT in 2013 to 4 million WMT.

Shipments of the same type of ore material from the company’s Rio Tuba operation to Coral Bay of 3.4 million WMT remain unchanged.

Exports of ore to China decreased from 8.7 million WMT in 2013 to 8.5 million WMT in 2014, while shipments to Japan increased from 1.1 million WMT in 2013 to 1.8 million WMT in 2014. About 158 thousand WMT was also exported to Australia in 2014.

The effect of the Indonesian ore ban in January 2014 led to a surge in prices, particularly in the second and third quarters of the year.

On a US dollar per WMT basis, the average realized price for ore exports amounted to $45.10 in 2014 compared to $21.28 per WMT the previous year.

Sales to both the Coral Bay and Taganito HPAL plants, which remain benchmarked to the LME, enabled Nickel Asia to realize an average price of $7.69 per pound of payable nickel compared to $6.70 per pound in 2013.

“The much improved market conditions and higher ore production and sales

resulted in record-breaking earnings last year,” said Gerard H. Brimo, Nickel Asia president and CEO. “We are also delighted at the results of the first full year of operations of the new Taganito HPAL plant, which has met all expectations.”