Nickel Asia revenue up 12% in 9 months

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Danessa Rivera – The Star of the Philippines

November 14, 2022 | 00:00

MANILA, Philippines – Listed Nickel Asia Corp. (NAC) reported a 12% increase in net profit at the end of September due to higher nickel ore prices and favorable exchange rates.

NAC said its attributable net income reached 6.9 billion pesos from January to September, up from 6.17 billion pesos last year.

The company’s revenue increased 2% to 21.51 billion pesos from 21.03 billion pesos despite lower sales volume of ore sold, largely due to higher nickel ore prices and at favorable exchange rates.

Its five operating mines sold a total of 12.44 million wet metric tons (WMT) of nickel ore, down 14% from 14.44 million WMT last year.

The decline in sales volume was almost directly proportional to unrealized business days caused by adverse weather conditions that adversely affected the company’s mining operations during the period.

“Despite challenges to our mining operations due to adverse weather conditions at our mine sites, favorable nickel prices on the London Metal Exchange (LME) and the strong dollar helped drive revenue up 2% from year over year,” said Martin Antonio, NAC President and CEO. Zamora said.

The weighted average selling price of nickel ore during the period increased 5% from $28.05 per WMT to $29.46 per WMT. The company earned 54.22 pesos on the dollar from these nickel ore sales, up 10% from 49.17 pesos last year.

Breaking down ore sales, NAC exported 6.68 million WMT of saprolite and limonite ore at an average price of $38.87 per WMT during the nine-month period, compared to 8.72 million WMT at $38.88 per WMT at the same time last year.

It also delivered 5.76 million WMT of limonite ore to the HPAL mills in Coral Bay and Taganito, whose prices are linked to the LME and realized an average price of $11.66 per pound of payable nickel. This compares to 5.72 million WMT at $8.20 per pound of nickel payable in 2021.

Expressed in dollars by WMT, the average price of deliveries to HPAL factories was $18.55 and $11.54 during the first three quarters of 2022 and 2021, respectively.

Due to the increase in the price of nickel on the LME during the period, NAC also recorded gains from its participation in the investments in the two high pressure acid leaching (HPAL) plants for a combined amount of 1, 02 billion pesos against 340.4 million pesos the previous year. .

The strong dollar also enabled NAC to register a 162% increase in net foreign exchange gains on its net financial assets denominated in foreign currencies to 1.54 billion pula against 587.2 million pula the previous year.

NAC’s renewable energy (RE) arm, Emerging Power Inc. (EPI), recorded a 60% increase in revenue to 393.67 million pesos and a 51% increase in EBITDA to 239.50 million. pesos.

This was primarily due to a 56% increase in generating capacity at its Jobin-SQM Inc. (JSI) operating arm to 79,022 megawatt hours after completing its 38 megawatt (MW) expansion last June. bringing its total capacity to 100 MW.

From January to September, 70% of the electricity supplied by JSI’s Sta. The Rita plant was sold to retail electricity suppliers under power supply agreements, while the remaining 30% was sold to the wholesale electricity spot market (WESM).

Overall, electricity sales were made at an average realized tariff of 4.98 pula per kilowatt hour.

JSI recorded a net income of 72.83 million pesos, allowing EPI to reduce its losses to 133 million pesos compared to the same period last year, a reduction of 53% thanks to economies of scale higher and at better market conditions.

EPI also began development and construction of an additional 68 MW at the Subic site last September, which is expected to come online by Q4 2023.

The RE unit also recently entered into a joint venture agreement with Shell Overseas Investments BV for the establishment of a platform to develop, own, operate and maintain large-scale onshore solar and wind power generation projects. , as well as battery energy storage systems in the Philippines.

The venture, 60% owned by EPI and 40% by Shell, under a new company Greenlight Renewables Holdings Inc., aims to have an aggregate operating capacity of 1,000 MW by 2028.

“The joint venture has the full support of EPI’s parent company, NAC. This partnership would allow both companies to boost the supply of renewable energy in the Philippines and is in line with NAC’s vision to become the premier ESG investment in the country,” Zamora said.

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