Corporate News

Global Ferronickel profit slumps 77% in 2015

Posted on April 12, 2016

GLOBAL Ferronickel Holdings, Inc., the Philippines’ no. 3 nickel producer by output, saw its profits slashed by 77% in 2015, as lower production was compounded by the decline in nickel ore prices.

In a disclosure to the stock exchange, the company said its net income stood at P1.112 billion in 2015, 76.92% lower than the P4.817 billion profit in 2014.

Total volume exported dropped 15% to 5.352 million wet metric tons (WMT) in 2015, bringing total ore export revenues to $142.94 million, 47% lower than the previous year. Last year, the company refocused its production to middle-grade low-iron nickel ore, which mitigated the losses arising from low prices.

Global Ferronickel also cited the continued decline in nickel ore prices which averaged $26.69/WMT for 2015, 38% lower than the 2014 average of $43.30/WMT.

The company also cited the unusually heavy rainfall in June and August that affected ship loading activities, which reduced total shipments to 99 vessels last year from 117 in 2014.

At the same time, cost of sales fell by 9.1% to P3.398 billion, due to an increase in shipping and distribution costs.

“For 2016, we will implement cost-cutting measures to decrease our cost due to low fuel prices. Then, our exploration efforts in Surigao is bearing fruit and we expect results to be out by end 2Q16,” Global Ferronickel said.

This year, the company expects shipment volume to be flat. -- Janina C. Lim