MANILA, Philippines — Listed Nickel Asia Corp. saw its net income increase 11 percent to P728 million in the first quarter despite lower revenues brought about by weaker ore export prices.
In a report to the local bourse, Nickel Asia said revenues fell 13 percent to P2.16 billion due to weaker ore export prices following increasing ore shipments from Indonesia and a change in the ore mix.
“We are now feeling the effects of weaker prices on our traditional business of ore exports to China and Japan as a result of increased supply from Indonesia,” Nickel Asia president and CEO Gerard Brimo said.
Prices for the company’s traditional exports of ore for the production of nickel pig iron and ferronickel for stainless steel are currently under pressure due to increasing supply from Indonesia as a result of the partial lifting of its export ore ban in January 2017.
The average grade of ore for shipments also depressed prices after the company focused on shipments of higher grade ore last year to take advantage of higher prices.
However, this was offset by the net foreign exchange gains due to a weaker peso exchange rate combined with a turnaround in earnings from the company’s processing plant affiliates.
Nickel Asia’s net share of earnings on its 10 percent stake in Coral Bay and Taganito processing plants amounted to P195 million. This was a turnaround from the P11 million loss in 2017 driven by strong cobalt prices.
The company’s operating mines sold 1.09 million wet metric tons (WMT) of nickel ore, three percent higher year on year.
Prices of nickel ore exports averaged at $17.07 per WMT, down 46 percent from the average selling price of $31.67 per WMT a year ago.
Low-grade limonite ore shipped to the Coral Bay and Taganito processing plants, which remain linked to prices at the London Metal Exchange, fetched an average price of $6.02 per pound of payable nickel compared to $4.66 per pound sold a year earlier.
Nickel Asia is a global supplier of lateritic nickel ore and exports both saprolite and limonite ore to customers in Japan and China.
Its operating mines are Rio Tuba, Taganito, Cagdianao and Taganaan, all located in the southern part of the Philippines.