Global Ferronickel Holdings Inc. (FNI) said its net income in January to June declined as bad weather made it difficult for the company to ship more nickel ore.
The company said its consolidated net income in the first half reached P417.4 million, 34.9 percent lower than last year’s P640.8 million. Revenues also slid 15 percent to P2.21 billion from the previous year’s P2.61 billion due to lower volume of ore shipped.
“The Group encountered more rainy days this period totaling 128 rainy days compared to 105 rainy days during the same period in 2021,” the company said in a statement.
FNI said it managed to complete 19 shipments of nickel ore totaling 1.035 million wet metric tons (WMT) during the six-month period, compared to 32 shipments totaling 1.740 WMT last year.
“We are hoping for better weather in the third quarter, during the peak of PGMC’s [Platinum Group Metals Corp.] mining season that normally delivers more than 60 percent of FNI’s revenues for the year,” said FNI President Dante R. Bravo.
FNI said the results in the first half were driven by the April to June mining operations of PGMC in Surigao del Norte, with incremental contributions from PGMC International Limited (PIL), a wholly-owned subsidiary established to facilitate relations with Chinese customers for the trading of mineral products. PGMC, a wholly-owned subsidiary of FNI, is the second-largest value exporter of nickel ore in the country.
Despite the fewer volume sold for the first half, FNI said it benefited from the higher average realized foreign exchange rate this year at P52.60 compared to the prior period’s P48.24, augmenting revenues by a total of P177.1 million.
“Nickel ore prices are also higher this year with an overall average realized nickel ore price at $39.21 per WMT, compared to last year’s period at $31.10 per WMT, topping up revenues by P405 million.”
The resulting sales mix was 79 percent low-grade ore and 21 percent medium-grade ore in 2022 in contrast to the previous period’s mix of 84 percent low-grade ore and 16 percent medium-grade ore.
These shipments comprise 0.816 million WMT low-grade nickel ore and 0.219 million WMT medium-grade nickel ore compared to 1.465 million WMT low-grade nickel ore and 0.275 WMT medium-grade nickel ore of the same period in 2021.
“We have adjusted our 2022 shipment target to 4.0 million WMT but we still look forward to a productive and remarkable season due to the strong demand from China and favorable market conditions,” said Bravo.
In March, the company reported that its net income rose by nearly 6 percent to P1.98 billion in 2021, from the previous year’s P1.87 billion, despite bad weather conditions.
FNI said its revenues last year were up by P445.5 million, or 6.1 percent, to P7.71 billion in 2021 versus the P7.26 billion recorded in 2020.
Bravo said bad weather caused the company’s shipment volume to fall by 13.1 percent as it managed to ship 90 vessels of nickel ore for a total of 4.887 WMT in 2021 against the 103 vessels totaling 5.625 million WMT in 2020.
FNI’s overall average realized nickel ore price for 2021 was higher by 21.5 percent at $31.78/WMT compared to $26.16/WMT for 2020.
