The Philippine Stock Exchange. FILE IMAGE
Despite a weaker local currency and competition from rising ore exports from Indonesia, listed Nickel Asia Corp. (NAC) saw its net income rose by 1.94 percent to P1.57 billion from P1.54 billion last year.
The company’s income was mainly generated by its two processing plants – Coral Bay Nickel Corp. (CBNC) and Taganito HPAL Nickel Corp. (THPAL) – which benefited from higher prices for the industrial metal.
In a disclosure to the Philippine Stock Exchange, NAC noted that this “more than offset the drop in the company’s revenues,” which amounted to P2.60 billion from P3.64 billion in the prior year.
In contrast to declining prices of ore exports, nickel’s price on the London Metals Exchange (LME) has been on an uptrend following lower inventories of refined metal globally. This is due in part to the growing demand for nickel used in batteries for the electric vehicle market.
Consequently, NAC reported a significant increase in profit from its 10-percent share in the CBNC and THPAL plants. From P55 million in 2017, its income surged nine-fold to P526 million.
“We expect to continue benefitting from a significant price improvement on ore deliveries to the two processing plants, which are linked to LME prices,” NAC president Antonio G. Zamora said.
“This component of our business, changes to our ore export grade mix and the stronger performance of the two processing plants, will be our key drivers for earnings growth this year,” he added.
Nonetheless, the partial lifting of Indonesia’s export ore ban and its negative effect on ore export prices continue to hurt NAC’s operations. This, Zamora said, remains the firm’s “biggest challenge for the remainder of the year.” /jpv