Nickel Asia profit surges in 1st half

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taganito mining
NICKEL Asia's Taganito mine located in Claver, Surigao del Norte. — WWW.NICKELASIA.COM

LISTED Nickel Asia Corp. saw a surge in profits, breaching the P1 billion mark amid higher production on the back of improved metal prices.

In a regulatory filing on Friday, the firm said its attributable net income (net of minority interests) during the six months ending June rose to P1.54 billion, a substantial jump from the P24 million reported during the same period last year.

The firm’s earnings before interest, tax, depreciation and amortization (EBITDA) amounted to P3.64 billion, up from the P1.84 billion in the prior year.

“The combined effects of the Company focusing more on shipments of its higher value saprolite ore, more particularly in the first quarter when prices were firmer, a stronger US dollar and a turnaround in profits from the Company’s equity share in its investment in both the Coral Bay and Taganito processing plants, resulted to a significant improvement in earnings during the first half,” read the firm’s statement.

Nickel Asia’s total profit from Coral Bay and Taganito’s high pressure acid leaching facilities (HPAL) — in which it has a 10% stake each — reached P55 million, a turnaround from the P484 million loss registered last year. This was driven by strong cobalt prices which is a by-product of both plants.

In the first half, the firm sold 8.92 million wet metric tons (WMT) of nickel ore, up slightly from last year’s 8.54 million WMT.

Of this volume, 4.19 million WMT was saprolite ore and 4.74 million WMT was limonite, higher than the 2.76 million WMT and 5.78 million WMT respectively sold in the first half of 2016.

Meanwhile, some 4.24 million WMT were delivered to both the Coral Bay and Taganito processing plants in the first half, compared with the 3.40 million WMT delivered in the same period last year.

The average price of nickel was pegged at $4.40 per pound of payable nickel on the company’s shipments of ore to the two HPAL plants, slightly higher than the $3.92 per pound last year.

In the first half, the company saw an average price of $25.88 per WMT on export sales, a 42% hike year-on-year. The average price received for sales of both saprolite and limonite ore was $16.06 per WMT, 26% higher than the prior year’s $12.72 per WMT.

“The impressive improvement in the financial results of the Coral Bay and Taganito processing plants driven by strong cobalt prices has certainly contributed to our performance in the first half,” President and CEO Gerard H. Brimo was quoted as saying in the statement.

“We are also seeing nickel prices bouncing back from the lows experienced in recent months, a good sign as we are now in our peak shipment season.”.

On Friday, Nickel Asia’s board of directors approved an additional equity contribution of P1.5 billion in Emerging Power, Inc. (EPI), its power subsidiary, and the conversion to equity of the firm’s loan of P1.5 billion in EPI.

The additional equity contribution will boost the company’s equity to over 90% and allow EPI to pare down debts and interest costs substantially, the firm said.

Earlier this year, EPI completed 32 megawatts of solar power under its 100 megawatt solar and 50 megawatt wind service contracts in Subic Bay Freeport.

Trading of Nickel Asia shares climbed 0.81% to close at P6.20 each. — Janina C. Lim