NICKEL ASIA Corp. (NAC) reported a 68% decrease in attributable net income for the first quarter, as the peso strengthened against the US dollar.

In a disclosure on Tuesday, the listed miner said earnings slid to P147.6 million during the January to March period, from the P456.7 million recorded during the same period last year.

At the same time, earnings before interest, tax, depreciation, and amortization (EBITDA) slipped by 11% to P613.8 million from P686.3 million, quarter-on-quarter

“The lower earnings during the first quarter was due primarily to the impact of a strengthening Peso relative to the US Dollar resulting to a net foreign exchange loss of P6.7 million, a turnaround from a gain of P344.0 million recognized last year,” Nickel Asia said.

The mining company reported a P25.3-million net loss from its equity investments in Coral Bay Nickel Corp. and Taganito HPAL Nickel Corp. (THPAL), against the P194.7 million earned during the same period last year.

NAC’s share of earnings from Coral Bay HPAL dropped 53% to P53 million in the first quarter, due to falling nickel and cobalt prices. The drop in prices also affected the THPAL plant, which likewise saw a P78.3-million loss. The plant also had to undergo a three-week maintenance shutdown last March.

NAC said it sold around 2.89 million wet metric tons (WMT) of nickel ore during the first quarter of the year, 6% lower than the 3.09 million WMT sold in the same period the previous year.

“Ore deliveries to the two processing plants, which increased from 2.0 million WMT in 2018 to 2.14 million WMT this year did not sufficiently offset the decline in ore export volumes, which fell to 749,000 WMT from 1.09 million WMT last year,” the company said.

NAC said it realized an average of $5.56 per pound of payable nickel on its shipments of ore to the two plants, 8% lower than the average of $6.02 per pound of payable nickel during the same period in 2018.

In terms of export sales, Nickel Asia said it realized an average price of $19.01 per WMT, 7% higher than the $17.82 per WMT in 2018.

On a combined basis, the average price for sales of ore exports and ore deliveries to the two plants stood at $10.63 per WMT, 10% lower than the $11.85 in 2018.

“Nickel ore shipments from Indonesia are expected to increase further for a third successive year and will continue to put pressure on ore export prices this year,” Martin Antonio G. Zamora, president of NickelAsia.

“On the other hand, the medium-term outlook for London Metal Exchange-linked nickel is likely to improve. We anticipate this segment of our market to account for 46% of total shipments for the year, much higher compared to 40% in 2018,” Mr. Zamora added. — VMPG