Nickel Asia Corp. (NAC) has reported a 53-percent increase in its net income in the first quarter to P576 million from P377.5 million a year ago.
This was despite the softening of ore prices in the world market brought about by the rise in supply coming from Indonesia following the partial lifting of its export ban on ore.
In a disclosure to the Philippines Stock Exchange, NAC said its earnings before interest, tax, depreciation and amortization (Ebitda) dropped to P685.1 million from P1.34 billion a year ago.
Prices of ore during the period went down to $17.07 per wet metric ton (WMT) from $31.67 per WMT in the same period last year.
NAC’s operations in its Rio Tuba and Taganito mines produced 1.09 million WMT and 1.06 million WMT of ore for export, respectively.
Revenue went down to P2.16 billion in the first quarter from P2.49 billion in the same period last year.
“We are now feeling the effects of weaker prices on our traditional business of ore exports to China and Japan as a result of increased supply from Indonesia,” said NAC president and CEO Gerard H. Brimo.
“On the other hand, we are fortunate that there has been a significant price improvement on our deliveries to the two processing plants, which are linked to LME (limonite ore) prices,” he added.
In contrast to lower prices of ore exports, LME nickel prices have been on the rise as demand for nickel for use in batteries for electric vehicles continue to grow. The company realized an average of $6.02 per pound of payable nickel on 2 million WMT of limonite ore deliveries to its two plants.
This is higher than the average price of $4.66 per pound a year ago, with 1.99 million WMT of limonite ore.
This offset the decline in the company’s revenue from ore exports.
“This component of our business [processing] will be the key drivers of our earnings this year,” Brimo noted.