Marcventures falls to P62-M loss in 9 months

MANILA, Philippines - Marcventures Holdings, Inc., the parent company of Marcventures Mining and Development Corp. (MMDC), incurred a P62 million net loss in the nine months ending September due to weak metal prices.

The company disclosed to the local bourse revenues declined 4.9 percent to P1.85 billion from January to September as nickel sales fell 48.06 percent during the period. 

The nine-month profit loss was a reversal of the P677.1 million income reported  in the same period last year.

In the first three quarters, MMDC shipped a total of 2.81 million wet metric tons (WMT) of nickel ore to China, higher than the 1.6 million WMT shipped a year ago.

In 2014, the Mines and Geosciences Bureau suspended the operations of MMDC in Surigao del Sur after its mining operations were found to be unsystematic. The unit resumed full operation in August 2014 when the MGB lifted the suspension order.

 For the third quarter alone, MHI’s consolidated net income dropped by 88.9 percent to P59.1 million as revenues dipped to P1.16 billion from P1.3 billion.  MMDC sold 1.77 WMT of nickel ore to China compared to only 992, 359 WMT last year.

Despite an increase in tonnage, revenues were pulled down as MMDC suffered a 50.7 percent decline in the sale price of nickel.

In October, the Department of Environment and Natural Resources (DENR) allowed MMDC to increase its annual nickel ore production.

The  DENR-Environmental Management Bureau has granted MMDC an increase in its allowable annual nickel ore production from three million MT to five million MT.

“MMDC hopes to be able to still take partial advantage of the new tonnage for 2015 banking on possible dryer condition predicted for the last two months of the year,” MHI said in an earlier disclosure.

MHI said the full benefit of the increase in the allowable nickel ore production of MMDC would be realized in 2016 onwards.

The parent firm said its mining subsidiary is still expected to be profitable despite the decline in metal prices because of “tightly controlled mining costs.”

Most mining firms are still reporting lower earnings because of prevailing weak metal prices resulting from increase in supply and weak global demand.

The weak demand overseas is caused by the slowdown in demand from China, which accounts for 50 percent of the global nickel consumption.

As such, Philippine nickel miners are striving to cut production costs while ramping up production during the upcoming dry months as the prevailing dry spell is expected to intensify this quarter and linger until the second quarter of next year.

MHI, through MMDC, holds a mineral production sharing agreement covering 4,799 hectares in Surigao del Sur, mining in 120 hectares of the tenement.