On lower metal prices: Nickel Asia profit falls 65% in Q1

MANILA, Philippines - Listed miner Nickel Asia Corp. registered a 65-percent drop in its net income in the first quarter of the year on lower metal prices and an appreciating peso.

In a regulatory filing, the company reported a net income of P100.3 million against P286 million in the same period last year.

The company attributed the lower earnings to lower ore prices based on pricing in the London Metal Exchange (LME), a stronger peso, and higher depreciation expenses.

“Due to the seasonality of our business, typically the first quarter is the slowest quarter,” said Nickel Asia president and CEO Gerard Brimo.

“As we have accomplished in prior years, our sales volume is expected to increase further as we enter the shipping season, and particularly as the start-up of the new Taganito plant progresses to commercial operation by the latter part of this year.”  

Earnings before interest, taxes, depreciation and amortization (EBITDA) fell to P629.8 million against P932.4 million the previous year.

Total revenues during the first quarter of the year fell to P1.40 billion from P1.75 billion in 2012.

Total operating cash cost fell eight percent during the first three  months of the year to P968.5 million from P1.05 billion in 2012.

Operating cash cost on a per wet metric ton (WMT) of ore sold fell to P534 per WMT from P556 per WMT in the same period in 2012.  

The company also sold a lower volume of nickel ore during the the first three months of the year. Shipped out were P1.74 million WMT of nickel ore in the first quarter of the year against 1.82 million WMT in the same period last year.

Of the total volume of ore sold, 307,000 WMT  of saprolite ore was shipped to its Japanese customers, 581,000 WMT of low-grade saprolite and limonite ore were shipped to its Chinese customers, and 852,000 WMT of limonite ore was delivered to the Coral Bay hydrometallurgical processing plant.

The average nickel price applicable to 983,000 WMT of ore shipped in the first quarter was placed at $7.81 per pound of payable nickel against $8.87 per pound of payable nickel in the same period last year.

The balance of the company’s shipment for the first quarter was sold on negotiated prices per WMT of ore, which averaged at $22.84 per WMT against $22.45 per WMT in the same period last year.

The realized peso-dollar exchange rate during the first quarter of the year was 40.69 against 43 during the same period last year.

Nickel Asia’s shipments during the first quarter were primarily from its Rio Tuba and Taganito mines.

The Rio Tuba mine shipped out 477,000 WMT of saprolite ore and one million WMT of limonite ore, while its Taganito mine shipped 197,000 WMT of saprolite ore.

The company’s Taganaan mine shipped 55,000 WMT of limonite ore during the latter part of the quarter.

Its Cagdianao mine, meanwhile commenced ore shipment last month.