Nickel Asia profit drops 45% in H1

MANILA, Philippines - Profits of listed Nickel Asia Corp. fell 45 percent in the first half of the year to P1.49 billion despite higher shipment volume.

In a filing with the local bourse, the company said the decline in net earnings was due to lower ore prices.

Earnings before interest, tax, depreciation and amortization (EBITDA) slid to P3.54 billion from P5.83 billion last year.

The company’s four operating mines sold an aggregate volume of 9.68 million wet metric tons (WMT), higher than 7.73 million WMT sold in the same period last year. The increase in shipment volume was mainly the result of increased sale of middle grade ore to China.

Out of the total volume of ore shipped out in the first half, 3.78 million WMT was saprolite ore and 5.90 million WMT was limonite ore.

Despite higher shipment volume, the company’s total revenues dipped to P7.97 billion as the price of nickel continues to be low.

Nickel ore sold to the Taganito and Coral Bay HPAL plants fetched an average price of $6.22 per pound of payable nickel as against $7.57 per pound of payable nickel last year.

Export sales fetched an average price of $23.10 per WMT compared to $41.52 per WMT last year.

As a result of the increase in shipment volumes, total costs and expenses incurred by the company rose from P4.26 billion to P5.22 billion.

“The price of nickel continued to perform well below our expectations. However, in spite of current very low prices, our operations remain profitable and we should see some price recovery in the latter part of the year, “ said company president and CEO Gerard Brimo.

The company earlier said it would benefit from the dry spell that is seen to peak during the last quarter of the year as rains are deterrent to nickel production.