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Nickel Asia profit up 40% on higher ore prices

NICKEL Asia Corp. reported that its first-half attributable net income increased by 40.3% to P3.83 billion from P2.73 billion, due to higher nickel ore prices and favorable exchange rates.

“The first half of 2022 was not without its challenges especially for our mining operations, brought about by weather conditions at our mine sites, particularly in Surigao, and continuing lockdowns in China, our major market,” Nickel Asia President and Chief Executive Martin Antonio G. Zamora said in a disclosure on Thursday.

In its unaudited financial and operating results, the firm reported that its revenues increased by 7% to P11.78 billion from P11.01 billion despite the lower ore volume sold during the period.

Earnings before interest, tax, depreciation and amortization (EBITDA) also grew by 19% to P6.33 billion from P5.32 billion the year prior.

Meanwhile, Nickel Asia’s four operating mines sold a combined 6.95 million wet metric tons (WMT) of nickel ore during the first half of the year, down 16% from 8.30 million WMT in the same period last year.

“The drop in sales volume was almost in direct proportion to unrealized workable days caused by inclement weather that adversely affected the company’s mining operations during the period,” the firm said.

In the first half of the year, the weighted average prices of nickel ore sales rose by 18% to $30.03 per WMT against $25.54 per WMT in the same period last year.

“The company also realized P52.56 per US dollar from these nickel ore sales, a 9% increase from P48.25 last year,” it added.

Nickel Asia also reported that its renewable energy business and subsidiary Emerging Power, Inc. (EPI) energized another 38-megawatt (MW) solar farm in Subic, Zambales in June, bringing the total capacity of the site to 100 MW.

“For 2022, the Subic plant has been operating at an 18-19% plant efficiency factor with 90% of generation contracted under power sales agreements,” the firm added.

EPI has another 100-MW service contract for the Subic site and will commence construction of a 68-MW facility in August. It is expected to be completed by the third quarter of next year.

The subsidiary was chosen by Shell Overseas Investments B.V. to be its exclusive local partner in solar, onshore wind, and battery storage joint venture that aims to contribute up to 3 gigawatts (GW) to the Philippines’ renewable energy capacity.

Nickel Asia said it is evaluating a range of financing alternatives including accessing global debt capital markets to raise EPI’s share of the equity required for an initial 1-GW target by 2028, among other uses.

“We remain confident that our mining and renewable energy businesses provide a solid foundation… which is to become the premier ESG investment in the country and to be counted among the top 25 Philippine Stock Exchange-listed companies in terms of market capitalization by 2025,” said Mr. Zamora.

At the stock exchange on Thursday, Nickel Asia shares dropped by 0.34% or two centavos to finish at P5.83 apiece. — Luisa Maria Jacinta C. Jocson

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