Global Ferronickel Holdings Inc., a leading nickel ore producer in the Philippines, reported a 40.8 percent drop in attributable net income to P207.1 million in the first half of the year from P349.5 million in the same period of 2023.
In a disclosure to the Philippine Stock Exchange (PSE), the firm said its six-month revenues dipped to P3.08 billion in 2024 from P3.12 billion in the comparative period last year.
Mining revenues were relatively flat year-over-year at P3.07 billion, despite achieving record sales volumes as prices remained subdued due to supply surplus in the nickel ore and nickel pig iron markets.
“We finished the first half of the year with strong operational and cost performance,” FNI President Dante R. Bravo said.
He added that “we delivered incremental improvements in our supply chain including equipment productivity and technology integration, which increased production flexibility and cost efficiency."
“This continued execution positions us to maximize performance in the second half of the year as well as meet our near-term priority of doubling our capacity in Palawan to three million WMT (wet metric tons) from 1.5 million WMT annually,” said Bravo.
Total sales volume was 2.11 million WMT, 44.6 percent higher than in the first half of 2023, setting new records in line with production volumes, and demonstrating reliability in performance amid various operational scenarios and weather events.
Of the total sold volume, medium-grade ores comprised a greater share over low-grade ores at 59 percent and 41 percent, respectively, compared to the corresponding share of 52 percent and 48 percent last year.
At Palawan, shipments reached 1.08 million WMT, 53.6 percent higher than in the first half of 2023, supported by recently expanded infrastructure, notably mine facilities and causeways, along with optimized processes in the areas of logistics and human resources.
In the second quarter, it delivered 0.695 million WMT, the highest quarterly output since the project commenced operations in September 2022
At Surigao, shipments rose to 1.03 million WMT, 36.2 percent higher than in the first half of 2023, as favorable weather conditions allowed production activities such as ore extraction and building of inventory to start in the first quarter, as planned.
The improved availability of key inputs to production also contributed to volume growth, including chartered landing craft tanks for shipside loading of ores as well as transportation and handling equipment for mine operations and safety.
The average realized nickel ore price was $25.35 per WMT, 33.9 percent lower than the first half of 2023 and still well below the three-year historical average of $32.25.
Medium-grade ores had an average price of $30.54 per WMT, down 40.5 percent, while low-grade ores sold at $17.98 per WMT, down 25.5 percent.
On the cost front, cost of sales came in at P1.74 billion, 34.9 percent above first half 2023, as a result of larger production and shipping volumes.
This reflected a rise in contractor rates, particularly in Surigao, due to the change in sales mix and sources of nickel ore deposits, where the location affects the hauling distance and ultimately the mining cost.
Additionally, operating expenses totaled P1.07 billion, up 16.1 percent. This increase mainly relates to revenue-based government excise taxes and royalties, as well as licenses, partially offset by lower stevedoring charges and shipping expenses.