Nickel Asia’s Earnings Hit by 30% Drop as Ore Prices Fall
Nickel Asia Corporation (NAC) has reported a 30% decline in net income for the first nine months of 2024, mainly due to weaker nickel ore prices. The mining firm's net income fell to PHP 2.55 billion (USD 45.1 million), down from PHP 3.65 billion (USD 64.5 million) during the same period last year.
The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) also slipped to PHP 6.64 billion (USD 117.5 million), compared to PHP 8.83 billion (USD 156.2 million) last year. Revenue from ore sales took a 12% hit, dropping to PHP 14.99 billion (USD 265.3 million) from PHP 16.96 billion (USD 300.5 million), largely because of an oversupply in the nickel market.
Despite lower prices, NAC's operating mines sold 13.57 million wet metric tons (WMT) of nickel ore, a 4.3% increase compared to 13.01 million WMT sold last year. However, the average nickel ore sales price was down 18%, falling to USD 19.09 per WMT from USD 23.24 per WMT.
Breaking down the sales, NAC exported 8.07 million WMT of saprolite and limonite ore at an average price of USD 24.74 per WMT, compared to 7.29 million WMT at USD 29.15 per WMT in 2023. Additionally, the company delivered 5.49 million WMT of limonite ore to the Coral Bay and Taganito high-pressure acid leach (HPAL) plants at an average price of USD 7.78 per pound of payable nickel, equivalent to 8.99% of the London Metal Exchange (LME) benchmark. This was a drop from last year's 5.72 million WMT at USD 10.53 per pound, equivalent to 9.87% of LME.
NAC also recorded losses from its investments in the two HPAL plants, totaling PHP 665.25 million (USD 11.8 million), compared to losses of PHP 379.23 million (USD 6.7 million) the previous year.
On a positive note, Emerging Power Inc. (EPI), a subsidiary of NAC, boosted power generation at its Mt. Sta. Rita solar plant in Subic Freeport by 58%, reaching 167,730 megawatt hours. The expansion followed the addition of 72 megawatts in February, bringing the plant's total capacity to 172 megawatts. This helped EPI achieve a 68% increase in EBITDA, rising to PHP 742 million (USD 13.1 million).
NAC President and CEO Martin Antonio G. Zamora expressed optimism about the company’s future growth, highlighting the start of operations at the Manicani site in Eastern Samar and the Bulanjao site in Palawan. He noted infrastructure improvements in Dinapigue, Isabela, which are expected to boost production capacity.
"We are optimistic that these new nickel mines will drive volume and revenue growth in the coming years," Zamora said. He also pointed out that the company's solar energy projects are on track, with the Leyte solar project set to complete its first phase by the second quarter of next year, adding 120 megawatts. The first phase of the CAWAG solar project in Subic, Zambales, is expected to be operational by the fourth quarter of 2025, contributing an initial 70 megawatts.
"These developments align with our goals of increasing nickel production and reaching 1 GW of renewable energy capacity attributable to NAC by 2028," Zamora added.
