The country’s biggest nickel miner on Tuesday said its net income in the first six months of the year dropped by almost half from a year ago due to weak metal prices in the world market.
In a statement, Nickel Asia Corp. (NAC) said its net profit reached P2.17 billion in the January-June period, down 45 percent from the P4.03 billion recorded in the same period last year.
Despite an increase in the volume of shipments, total revenue dropped to PP7.97 billion from P9.34 billion last year as the price of nickel, like most other metals, has been declining since the start of the year.
“The price of nickel continues to perform well below our expectations. However, in spite of current very low prices, our operations remain profitable and we should see some price recovery in the latter part of the year,” said Gerard Brimo, NAC president and chief executive officer.
Total volume of nickel ore sold from the company’s four operating mines in the first half reached 9.68 million wet metric tons (WMT) as against 7.73 million WMT in the same period last year.
The rise in shipment volumes was mainly the result of increased sales of middle grade ore to China.
Of the total volume of ore shipped, saprolite ore accounted for 3.78 million WMT and limonite ore accounted for 5.9 million WMT, including 3.61 million WMT delivered to both the Coral Bay processing plant and the Taganito processing plant.
With respect to sales to HPAL (high-pressure acid leach) plants, the pricing of which remains linked to the London Metal Exchange (LME), the company realized an average of $6.22 per pound of payable nickel during the first half of the year as against $7.57 per pound of payable nickel during the same period last year.
For export sales, NAC achieved an average price of $23.10 per WMT compared to $41.52 realized last year.
As a result of the increase in shipment volumes, total costs and expenses increased to P5.22 billion in the first half of 2015 from P4.26 billion in the first half of last year.
However, on a per-WMT of ore sold, total costs and expenses decreased to P539 per WMT in 2015 compared to P550 per WMT in 2014. James Konstantin Galvez