February 9, 2023

Filipino Guardian

Sentinels of Filipino Free Press

Nickel Asia posts earnings up 12% to almost P7B

Public mining company Nickel Asia Corp. posted a 12% increase in its nine-month attributable net income to 6.90 billion pesos on higher ore prices.

In a stock exchange statement on Thursday, the mining company said revenue rose 2% from P21.03 billion to P21.51 billion due to favorable foreign exchange rates and higher nickel ore prices. Earnings before interest, taxes, depreciation and amortization (EBITDA) reached P11.10 billion, slightly up from P11.01 billion last year.

“Despite challenges in our mining operations due to adverse weather conditions at our mine sites, the favorable London Metal Exchange nickel price and the strong US dollar helped increase revenue by 2% year-over-year,” said Martin, President and Chief Executive Officer of Nickel Asia said Antonio G. Zamora.

Ore sales volume from five operating mines decreased 14% during the period to a total of 12.44 million wet tonnes (WMT) compared to 14.44 million WMT last year.

“The decline in sales volume was almost directly related to unrealized workdays caused by inclement weather that impacted the Company’s mining operations during the period,” said Nickel Asia.

For the nine month period, Nickel Asia reported that the weighted average nickel ore sales price increased 5% to $29.46 per WMT compared to $28.05 per WMT.

“The company realized 54.22 pesos per US dollar from these nickel ore sales, up 10% from 49.17 pesos last year,” the company said.

In detail, Nickel Asia exported 6.68 million WMT of saprolite and limonite ore at an average price of $38.87 per WMT for the period, down from 8.72 million WMT at $38.88 per WMT last year.

The Company also shipped 5.76 million WMT of limonite ore to its high pressure acid leach (HPAL) plants at Coral Bay and Taganito which averaged $11.66 per pound of nickel payable, higher than the 5.72 million WMT at $8.20 a pound last year.

The nine-month average price of shipments to HPAL factories was also higher at $18.55 versus $11.54 in 2021.

Separately, Emerging Power, Inc. (EPI), Nickel Asia’s renewable energy division, reported a 60% increase in revenue to Ptas 393.67 million, while its EBITDA also rose 51% to Ptas 239.50 million.

EPI’s improved performance resulted from a 56% annual increase in generation capacity of its Jobin-SQM, Inc. (JSI) arm to 79,022 megawatt hours (MWh) after completing its 38 MW expansion in June, bringing its total capacity to 100 MW .

Power sales from JSI’s Sta. The Rita system had an average realized tariff of P4.98 per kilowatt hour. Of the plant’s electricity production, 70% was sold to retail electricity suppliers through power purchase agreements, while 30% was sold to the wholesale electricity spot market.

“JSI reported net income of P72.83 million, allowing EPI to reduce its losses to P133 million from the same period last year, a 53% reduction thanks to greater economies of scale and improved market conditions,” said Nickel Asia.

EPI’s construction of the additional 68 MW in Subic is expected to go online in the last quarter of 2023.

Recently, EPI entered into a joint venture agreement with Shell Overseas Investments BV to create a platform for owning, operating and servicing onshore solar and wind power generation projects and utility-scale battery storage in the country.

The company, with equity ownership of 60% EPI and 40% Shell through a newly formed company Greenlight Renewables Holdings, Inc., is projected to have a total operating capacity of 1,000MW by 2028.

According to Nickel Asia, the joint venture is also a way to explore synergies with retail electric utility Shell Energy Philippines, Inc. to offer customers integrated value.

Meanwhile, in a separate disclosure, Nickel Asia announced that its Board of Directors has approved to guarantee the P2 billion loan facility to be received from EPI.

The mining company announced that EPI would receive the loan from Security Bank Corp.

“Proceeds from the loan will be used to fund Phase 4A expansion of EPI’s solar energy subsidiary JSI’s 68 MW Subic solar power plant,” said Nickel Asia.

Nickel Asia also mentioned that its Board of Directors approved the renewal of the P1.095 billion promissory notes issued by JSI. The notes concerned Nickel Asia’s advances used by JSI for Phase 3B of its solar power plant expansion project last year.

On Thursday, shares of Nickel Asia were up 17 centavos, or 3.28%, to close at P5.36 a share. – Revin Mikhail Ochave