Nickel Asia income drops 61% in 9 months

MANILA, Philippines – Nickel Asia Corp. saw a 61 percent drop in net income in the first nine months of the year owing to lower nickel prices and sales volume.

In a report to the local bourse, Nickel Asia said net earnings reached P980 million, down from P2.49 billion in the same period a year ago due to its share of the losses on its 22.5 percent equity interest in Taganito Nickel Corp. and its 10 percent equity interest in Coral Bay Nickel Corp.  amounting to P561 million.

“Our mining operations continued to be profitable despite very low nickel prices that during this nine month period averaged at a level not seen since about 13 years ago,” Nickel Asia president and CEO Gerard Brimo said.

Nickel Asia’s four operating mines sold a total of 15.2 million wet metric tons (WMT) of nickel ore, down five percent.

The drop in shipment volumes was due to the delayed start of shipments from its Hinatuan and Cagdianao mines due to the prolonged rainy season and resulting sea swells in northeastern Mindanao.

Prices of nickel ore exports averaged at $19.20 per WMT, significantly lower than the average of $22.70 per WMT during the first nine months of 2015.

Low-grade limonite ore shipped to the Coral Bay and Taganito processing plants, which remain linked to prices at the London Metal Exchange, fetched an average price of $4.19 per pound of payable nickel compared to $5.74 per pound sold a year earlier.

Meanwhile, Brimo expects a continuing improvement in prices in the world market.

“Nickel prices have started to improve in the third quarter of the year due to a global supply deficit resulting from a steady rise in nickel demand, particularly in China, and production cutbacks by a number of high cost producers,” he said.

Nickel Asia is a global supplier of lateritic nickel ore and exports both saprolite and limonite ore to customers in Japan and China.

Its operating mines are Rio Tuba, Taganito, Cagdianao and Taganaan, all located in the southern part of the Philippines.