Nickel Asia profit rises by 41% in H1

MANILA, Philippines — Higher nickel ore prices and favorable exchange rates fueled a hike in Nickel Asia Corp.’s net earnings in the first semester of the year.

In a disclosure to the Philippine Stock Exchange yesterday, Nickel Asia said its net income increased by 41 percent to P3.83 billion.

“The first half of 2022 was not without its challenges especially for our mining operations, brought about by weather conditions at our mine sites, particularly in Surigao, and continuing lockdowns in China, our major market,” Nickel Asia president and CEO Martin Antonio Zamora said in a statement.

“However, the higher LME nickel price and stronger US dollar tempered the impact on our revenues,” he said.

The company sold lower ore volume during the period, but revenues increased by seven percent to P11.78 billion due to higher nickel ore prices and favorable exchange rates.

Nickel Asia’s four operating mines sold a combined 6.95 million wet metric tons (WMT) of nickel ore during the period, down 16 percent from 8.30 million WMT in the same period last year.

The drop in sales volume was attributed to the unrealized workable days caused by inclement weather that adversely affected the company’s mining operations during the period.

Meanwhile, the weighted average nickel ore sales price rose by 18 percent to $30.03 per WMT. It also realized P52.56 per dollar from these nickel ore sales, a nine-percent increase from P48.25 last year.

Nickel Asia exported 3.12 million WMT of saprolite and limonite ore at the average price of $42.05 per WMT.

The company also delivered 3.83 million WMT of limonite ore to the Coral Bay and Taganito high-pressure acid leach (HPAL) plants – the prices of which are linked to the London Metal Exchange (LME) – and realized an average price of $12.52 per pound of payable nickel. This is higher than the 3.74 million WMT at $7.92 per pound of payable nickel in 2021.

Owing to the higher LME nickel price during the period, Nickel Asia recognized gains from its equity share in investments in the two HPAL plants amounting to P1.09 billion against P244.1 million last year.

The stronger dollar further enabled the company to log a 353-percent hike in net foreign exchange gains from its foreign currency-denominated net financial assets to P863.5 million.

For the company’s renewable energy business, Emerging Power Inc. energized a 38-megawatt (MW) solar farm in Subic, Zambales last June, bringing the total capacity on this site to 100 MW.

For this year, the Subic solar plant has been operating at an 18 to 19 percent plant efficiency factor with 90 percent of generation contracted under power sales agreements, realizing an average tariff of P4.65 per kilowatt hour.

EPI has another 100-MW service contract for the Subic site and will commence construction for a 68-MW solar farm this month. Completion is expected by the third quarter of next year.