Nickel Asia earnings rise 41%, plans $300 M green bond offer

Published August 4, 2022, 3:19 PM

by James A. Loyola

Nickel Asia Corporation (NAC), the Philippines’ largest producer of lateritic nickel ore, reported a 41 percent increase in attributable net income to P3.83 billion for the first semester of 2022 from P2.73 billion in the same period last year.

In a disclosure to the Philippine Stock Exchange, the firm said revenues increased by 7 percent to P11.78 billion from P11.01 billion last year, despite lower ore volume sold during the period, due largely to higher nickel ore prices and favorable exchange rates.

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NAC’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 percent 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 weighted average nickel ore sales price over the first half of year 2022 rose by 18 percent to $30.03 per WMT against $25.54 per WMT in the same period last year.

The Company also realized P52.56 per dollar from these nickel ore sales, a 9 percent increase from P48.25 last year.

Breaking down the ore sales, NAC exported 3.12 million WMT of saprolite and limonite ore at the average price of $42.05 per WMT during the six-month period compared to 4.55 million WMT at $37.62 per WMT in the same period last year.

It also delivered 3.83 million WMT of limonite ore to the Coral Bay and Taganito high-pressure acid leach (HPAL) plants, the prices of which are linked to the London Metal Exchange (LME) and realized an average price of $12.52 per pound of payable nickel.

This compares to 3.74 million WMT at $7.92 per pound of payable nickel in 2021. The average price for the deliveries to the HPAL plants were $20.23 and $10.85 in the first half of 2022 and 2021, respectively.

“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,” said NAC President and CEO Martin Antonio G. Zamora.

He noted though that, “the higher LME nickel price and stronger US dollar tempered the impact on our revenues.”

Owing to the higher LME nickel price during the period, NAC also recognized gains from its equity share in investments in the two HPAL plants in the combined amount of P1.09 billion against P244.1 million year-on-year.

The stronger US dollar further enabled NAC to log a 353 percent hike in net foreign exchange gains from its foreign currency-denominated net financial assets to P863.5 million from P190.6 million the year prior.

Meanwhile, NAC is planning to raise $200 million to $300 million from an issuance of Reg S green five-year bonds between November 2022 or the first quarter of 2023.

The proceeds of the offering shall be utilized for the funding of subsidiary Emerging Power, Inc.’s (EPI) renewable energy projects, primarily those forming part of the 1 GW project to be undertaken by the EPI-Shell Overseas Investments B.V. joint venture, as well as other projects of EPI.

 
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