Nickel Asia income down 5% to P2.1 billion in 6 months

MANILA, Philippines — Listed Nickel Asia Corp. saw its net income decrease five percent to P2.1 billion in the first semester of the year amid lower revenues brought about by weaker ore export prices in the global market.

In a report to the local bourse, Nickel Asia said revenues fell six percent to P7.38 billion due to weaker ore export prices, rising ore shipments from Indonesia and a change in the ore mix.

“The increasing ore supply from Indonesia and its negative effect on ore export prices remain our biggest challenge for the remainder of the year,” said Nickel Asia’s newly-appointed president Martin Antonio Zamora.

Prices for the company’s traditional exports of ore for the production of nickel pig iron and ferronickel for stainless steel are currently under pressure due to increasing supply from Indonesia as a result of the partial lifting of its export ore ban in January 2017.

The average grade of ore for shipments also depressed prices after the company focused on shipments of higher grade ore last year to take advantage of higher prices during the period.

However, this was slightly offset by the net foreign exchange gains due to a weaker peso exchange rate combined with a turnaround in earnings from affiliates’ processing plants.

Nickel Asia’s net share of earnings on its 10 percent stake in Coral Bay and Taganito processing plants jumped to P526 million from only P11 million last year, driven by strong cobalt prices.

The company’s operating mines sold 4.89 million wet metric tons (WMT) of nickel ore, up five percent year-on-year.

Prices of nickel ore exports averaged at $18.05 per WMT, down 30 percent from the average selling price of $25.96 per WMT a year ago.

Low-grade limonite ore shipped to the Coral Bay and Taganito processing plants, which remain linked to prices at the London Metal Exchange, fetched an average price of $6.27 per pound of payable nickel compared to $4.48 per pound sold a year earlier.

Meanwhile, Nickel Asia announced that its founder Manuel Zamora Jr. retired and has been appointed as chairman emeritus.

Former president Gerard Brimo is now chairman and CEO of the company. He is concurrently the chairman of the Chamber of Mines of the Philippines and a member of the multistakeholder group of the Extractive Industries Transparency Initiative.

Nickel Asia is a global supplier of lateritic nickel ore and exports both saprolite and limonite ore to customers in Japan and China.

Its operating mines are Rio Tuba, Taganito, Cagdianao and Taganaan, all located in the southern part of the Philippines.