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Business

Nickel Asia incurs P300-M loss in Q1

Ted P. Torres - The Philippine Star

MANILA, Philippines – Nickel Asia Corp. (Nickle Asia) has incurred a net loss of P300.8 million in the first quarter, down 55.5 percent from the P675.8 million loss in the same period last year.

The sluggish performance was due to the share of the losses on Nickel Asia’s 22.5-percent interest in Taganito HPAL Nickel Corp. oration and its 10 percent stake in Coral Bay Nickel Corp. in the total amount of P225.9 million.

The profitability of the two plants was affected by very low nickel prices realized during the period.

Nickel Asia president and CEO Gerard Brimo described the first quarter of 2016 was extremely challenging.

“It was the worst quarter we’ve seen for nickel prices in 13 years,” Brimo said.

Also contributing to the loss was the share of the pre-operating losses of P39 million by Emerging Power Inc., where Nickel Asia holds 66 percent.

Nickel Asia sold an aggregate 3.49 million wet metric tons (WMT) of nickel ore during the quarter, the same level as the first quarter of 2015.

Typically, low sales volumes occur during the first quarter since shipments at the  Taganaan and Cagdianao mines are either minimal or do not commence until the second quarter following the rainy season in the south of the country.

While in the prior year these operations managed to commence shipments in the first quarter, no shipments were made this year.

Additionally, a strategic decision was made to push back shipments of higher grade ore from its Rio Tuba and Taganito mines in anticipation of better prices in the succeeding quarters.

As a result, sales of the higher value saprolite ore dropped from 1.34 million WMT to 745,500 WMT while sales of limonite ore increased from 2.15 million WMT last year to 2.74 million WMT. Included in the limonite sales volumes are ore sold to the two HPAL plants, which remained unchanged at about two million WMT.

In terms of price, it realized an average of $3.85 per pound of payable nickel on its shipments of ore to the two HPAL plants. This compares to an average price of $6.50 per pound of payable nickel sold during the first quarter.

With respect to export sales, the company achieved an average price of $15.16 per WMT as against $32.35 per WMT in 2015.

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