Global Ferronickel Holdings Inc., one of the country's top nickel exporters, reported a 14.4 percent decline in attributable consolidated net income to P1.8 billion in the first nine months of 2023 due to higher costs related to the opening of a new mine.

In a disclosure to the Philippine Stock Exchange (PSE), the firm said its consolidated revenues rose 33.1 percent to P6.8 billion due mainly to increased volumes from its Palawan mine and its higher-grade nickel ores offset in part by lower volumes at the Surigao mine as a result of wet weather, as well as softer prices for low-grade ores.

“We are focused on strengthening the business and improving asset diversification,” said FNI President Dante R. Bravo. 

He added that, “notable progress made on the company’s strategic plans were the purchase of five landing craft tanks (LCTs) to drive meaningful operational and cost efficiencies in transporting nickel ores beginning 2024, and the acquisition of additional land in the Freeport Area of Bataan for our business expansion.”

Total sold volume grew 20.7 percent to 3.801 million wet metric tons (WMT), of which 2.711 million WMT were from Surigao and 1.090 million WMT were from Palawan. 

As a result, the sales mix was 68 percent low-grade ore and 32 percent medium-grade ore compared to 78 percent low grade and 22 percent medium grade in the year-ago period. 

The average realized nickel ore price was $31.93 per WMT, reflecting a 10.5 percent improvement driven by the more favorable mix and the stronger prices of higher-grade ores, which were 16.9 percent more than last year.

Cost of sales increased 37.8 percent to P2.8 billion due to the opening of Palawan mine which increased contract hires, depreciation and depletion, and personnel costs, while operating costs were up seven percent to P1.8 billion primarily related to general and administrative expenses. 

Finance costs totaled P213.9 million, in line with the recognition of interest expenses resulting from the acquisition of an associate company in 2022.

Consolidated net income contracted to P1.8 billion, which includes the share in net income of China-based associates of P310.3 million. 

After deducting the net income attributable to non-controlling interests, net income to FNI shareholders decreased 19.7 percent to P1.5 billion.