Nickel Asia H1 earnings surge by 41%
Listed Nickel Asia Corp. (NAC) reported a 41-percent surge in its first semester earnings mainly due to higher nickel ore prices.
The diversified natural resources development company told the local bourse its attributable net income for the six months of 2022 surged to P3.83 billion from P2.73 billion a year prior.
“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,” NAC president and CEO Martin Antonio Zamora said.
Despite lower ore volume sold, revenues inched up by 7 percent to P11.78 billion from P11.01 billion, largely because of “higher nickel ore prices and favorable exchange rates.”
NAC said its four operating mines sold a combined 6.95 million wet metric tons (WMT) of nickel ore during the comparative period, down by 16 percent from 8.30 million WMT.
“The drop in sales volume was almost in direct proportion to unrealized workable days caused by inclement weather that adversely affected the company’s mining operations during the period,” it said.
Amid this sales decline, NAC got a boost from the weighted average nickel ore sales price which rose by 18 percent to $30.03 per WMT from $25.54 per WMT.
The company realized P52.56 per US dollar from selling nickel ore, up by 9 percent from P48.25.
Breaking down the ore sales, NAC exported 3.12 million WMT of saprolite and limonite ore at the average price of $42.05 per WMT against last year’s 4.55 million WMT at $37.62 per WMT.
It likewise 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, the global marketplace for trading industrial metals, and realized an average price of $12.52 per pound of payable nickel.
Expressed in US dollar per WMT, the average price for the deliveries to the HPAL plants were $20.23 and $10.85 in the first half of 2022 and 2021, respectively.
The mining company also recognized gains from its equity share in investments in the two HPAL plants in the combined amount of P1.09 billion against P244.1 million, owing it to higher LME nickel prices.
Because of the stronger US dollar, NAC logged a 353-percent increment in net foreign exchange gains from its foreign currency-denominated net financial assets to P863.5 million from P190.6 million.
Earnings before interest, tax, depreciation and amortization increased by 19 percent to P6.33 billion from P5.32 billion.
Meanwhile, NAC subsidiary Emerging Power Inc. (EPI) energized last month its 38-megawatt solar farm in Subic, Zambales, bringing the total capacity on this site to 100 MW.
EPI secured another 100 MW service contract for the Subic site and will commence construction of a 68-MW farm in August, with completion expected by the third quarter of next year.
EPI earlier partnered with Shell Overseas Investments B.V. to develop 1 gigawatt of renewable energy projects in the Philippines by 2028.
The joint venture earlier indicated the original target could be increased to 3 GW by developing, owning, operating and maintaining onshore RE projects.
“NAC is evaluating a range of financing alternatives including accessing global debt capital markets to raise EPI’s share of the equity required for an initial 1GW target by 2028, among other uses,” NAC said.
Separately, the firm announced Florencia Tarriela was elected as its lead independent director, making her the second female executive on the NAC board.
Tarriela, currently serving as board advisor of the Philippine National Bank and an independent director of LT Group Inc., succeeded Jaime Bautista who is now serving as transportation secretary.
Her board seats include PNB Capital & Investment Corp., PNB International Investment Corp., Gozon Development Corp. and Tulay sa Pag-unlad Inc., a microfinance nongovernment organization.
She is also a liaison director to the Financial Executives Institute’s ethics and financial inclusion committees.
“We remain confident that our mining and renewable energy businesses provide a solid foundation on which to realize the OneNAC Vision’s twin objectives, which is to become the premier environmental, social and governance investment in the country and to be counted among the Top 25 PSE-listed companies in terms of market capitalization by 2025,” said Zamora.
