Nickel Asia income up 12% in 9 months

MANILA, Philippines — Listed Nickel Asia Corp. (NAC) reported a 12-percent rise in net earnings as of end-September due to higher nickel ore prices and favorable exchange rates.

NAC said its attributable net income reached P6.9 billion from January to September,   up from  last year’s P6.17 billion.

The company’s revenues rose by two percent to P21.51 billion from P21.03 billion despite the lower ore sales volume sold, owed largely to higher nickel ore prices and favorable exchange rates.

Its five operating mines sold a combined 12.44 million wet metric tons (WMT) of nickel ore, down 14 percent from 14.44 million WMT last year.

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

“Despite the challenges in our mining operations due to adverse weather conditions at our mine sites, the favorable London Metal Exchange (LME) nickel price and strong  dollar helped drive revenues up by two percent from the prior year,” NAC president and CEO Martin Antonio Zamora said.

The weighted average nickel ore sales price during the period increased by five percent to $29.46 per WMT  from $28.05 per WMT. The company realized P54.22 per   dollar from these nickel ore sales, a 10-percent increase from P49.17 last year.

Breaking down the ore sales, NAC exported 6.68 million WMT of saprolite and limonite ore at the average price of $38.87 per WMT during the nine-month period from 8.72 million WMT at $38.88 per WMT in the same period last year.

It also delivered 5.76 million WMT of limonite ore to the Coral Bay and Taganito HPAL plants, the prices of which are linked to the LME and realized an average price of $11.66 per pound of payable nickel. This compares to 5.72 million WMT at $8.20 per pound of payable nickel in 2021.

Expressed in   dollar per WMT, the average price for the deliveries to the HPAL plants were $18.55 and $11.54 in the first three quarters of 2022 and 2021, respectively.

Owing to the higher LME nickel price during the period, NAC also recognized gains from its equity share in investments in the two high-pressure acid leach (HPAL) plants with a combined amount of P1.02 billion against P340.4 million the prior year.

The strong dollar also enabled NAC to register a 162-percent hike in net foreign exchange gains from its foreign currency denominated net financial assets to P1.54 billion from P587.2 million the year prior.

NAC’s renewable energy (RE) arm, Emerging Power Inc. (EPI), registered a 60-percent increase in revenues to P393.67 million and a 51-percent increase in EBITDA of P239.50 million.

This was primarily due to a 56-percent jump in the generation capacity of its operating arm Jobin-SQM Inc. (JSI) to 79,022-megawatt hours after the completion of its 38-megawatt (MW) expansion last June, bringing its total capacity to 100 MW.

From January and September, 70 percent of the power from JSI’s Sta. Rita plant were sold to retail electricity suppliers through power supply agreements while the remaining 30 percent were sold to the Wholesale Electricity Spot Market (WESM).

Overall, power sales were done at an average realized tariff of P4.98 per kilowatt-hour.

JSI logged a net income of P72.83 million, allowing EPI to trim its losses to P133 million from the same period last year, a 53-percent reduction thanks to higher economies of scale and improved market conditions.

EPI also began the development and construction of an additional 68-MW in the Subic site last September, set to go online by the fourth quarter of 2023.

The RE unit also recently entered into a joint venture agreement with Shell Overseas Investments B.V. for the establishment of a platform to develop, own, operate, and maintain utility-scale onshore solar and wind power generations projects, as well as battery energy storage systems in the Philippines.

The venture, with an equity ownership of 60-percent EPI and 40-percent Shell, under a newly formed company Greenlight Renewables Holdings Inc., aims to have an aggregate operating capacity of 1,000 MW by 2028.

“The joint venture has the full support of EPI’s parent company, NAC. This partnership would allow both companies to boost the supply of renewable energy in the Philippines and is in line with NAC’s vision to become the premier ESG investment in the country,” Zamora said.