Nickel Asia profit falls 9% to P3.8 billion

MANILA, Philippines — Nickel Asia Corp. saw its net income decrease by 9.4 percent to P3.82 billion amid lower production and the decline in world market prices.

Earnings before interest, tax, depreciation and amortization also declined by 14 percent to P6.54 billion.

Total revenues fell four percent to P17.92 billion due to lower export shipments and a less favorable foreign exchange rate.

Nickel Asia president Martin Antonio Zamora said last year was challenging for the company due to the increase in nickel ore exports from Indonesia, which put a dampener on ore prices for most of the year.

“The twin effects of the Indonesian nickel ore ban, which took place on Jan. 1, 2020, combined with the bright outlook for LME-linked nickel, given the evolution of battery technology, will certainly bode well for our medium term prospects,” he said.

Nickel Asia said the lower earnings last year were due to the impact of a strengthening peso relative to the US dollar, which resulted in a net foreign exchange loss of P264 million.

The realized peso-US dollar exchange rate for ore sales was 51.72:$1 last year.

The company also reported P10 million in net earnings from its equity investments in Coral Bay Nickel Corp. and Taganito HPAL Nickel Corp.  The amount was lower than the P348 million recorded a year ago.

The loss from the two plants was mainly driven by the huge fall in cobalt prices, a by-product of both plants. The average realized cobalt price was $16.57 per pound of payable cobalt compared to $37.35 for the same period last year.

Overall, Nickel Asia sold an aggregate 18.8 million wet metric tons (WMT) of nickel ore, down 2.6 percent.

The firm focused more on shipments of its higher value saprolite ore to China resulting in a decline in export shipments.

In terms of prices, the firm realized an average of $6.23 per pound of payable nickel on its shipments, higher than the $5.95 per pound of payable nickel sold in 2018.

Nickel Asia is the country’s largest producer of lateritic nickel ore and is one of the largest in the world. It exports saprolite and limonite ore to processors in China and Japan, and sells limonite ore to downstream processing plant affiliates.