LISTED GLOBAL Ferronickel Holdings, Inc (FNI) reported a 34.6% drop in net income to P509.5 million in 2018 from P779.7 million posted in 2017, mainly due to higher taxes and increased operational costs.
In a statement, FNI said its bottomline was affected by the 200% increase in local business taxes, alongside a rise in excise tax to 4% from 2%.
“Due to the strong regulatory requirement and the new Temporary Revegetation Program (TRP) imposed by the Mines and Geosciences Bureau, the company’s Environmental Protection and Enhancement Program (EPEP) cost printed at P56.2 million versus P42.4 million in 2017,” the nickel producer said.
“However, these were tempered by the decrease in royalties to claim owner and the reduction of contract hire expenses following re-negotiation with mining contractors,” it added.
FNI’s sales of nickel ore slipped 5.7% to P5.48 billion in 2018, from P5.81 billion in the previous year.
“The Company’s revenues in 2018 remained strong despite challenging market conditions due to management’s decision to shift to selling higher grade ores and favorable foreign exchange rates,” FNI said, noting this decision was prompted by the continued weakness of nickel ore prices.
For 2018, the company shipped a total of 5.7 million wet metric tons (WMT) of nickel ore, 4.4% down from the 5.97 million WMT shipped in 2017.
The company said that it has shipped 47% low-grade ore and 53% medium-grade ore in 2018, as compared with the 61% low-grade ore and 39% medium-grade ore it has shipped in 2017.
Even though the price of medium-grade nickel ore and low-grade nickel ore dropped by 8.7% and 18.4% year on year respectively, FNI said its average realized price only slipped by 6.3%.
“We have proven time and again that our organization remains resilient to withstand changing regulatory landscape, tax regime, and market conditions,” Dante R. Bravo, FNI president who also heads the Philippine Nickel Industry Association (PNIA), was quoted as saying in a statement. — R.J.N.Ignacio