GLOBAL Ferronickel Holdings Inc. (FNI) said its nickel-ore shipment in the first half fell by 19 percent to 1.55 million wet metric tons (WMT) as the firm shifted to higher-grade minerals to capitalize better prices in the world market.
FNI, the country’s second-largest nickel producer, exported 1.91 million WMT of nickel ore during the January-to-June period of 2017.
“The decrease in shipment volume was due to the company’s decision to shift its focus towards higher-grade nickel ores that required more preparation, especially in anticipation of such shipments for the second half of the year, in order to maximize profitability,” the company said in a statement on Thursday.
FNI President Dante R. Bravo said this is the first time that the company is “pushing for shipment of higher-grade nickel ores with 1.65-percent nickel content to take advantage of its relatively high price with better margin.”
“Despite a very challenging first half of the year, measures to boost operational efficiency and our ability to adapt to the changing market conditions continue to enable us to achieve positive results,” Bravo was quoted as saying in the statement.
The FNI said the product mix of its shipment during the six-month period was at 43-percent low-grade ore and 57-percent medium-grade ore. The firm exported a mix of 63-percent low-grade and 37-percent medium-grade nickel ores in the same period of 2017.
The current product mix, the mining firm said, allowed it to earn an average revenue per vessel of P51 million, 4 percent lower compared to the same period last year.
The double-digit decrement in ore-shipment volume coupled by lower prices of nickel slashed FNI’s first-half net income to P3.98 million, from P151.76 million a year ago.
“Revenue fell by 23.2 percent year-on-year to [P1.43 billion] due to the lower prices of nickel ore during the same period in 2017,” it said.
The firm’s average realized nickel-ore price for the January-to-June period was at $17.59 per WMT, 9.52 percent lower than the $19.44 per WMT average quotation last year.
“Despite the decline in revenues, the company managed to maintain its gross-profit margin at 45 percent,” FNI said.
“Another favorable factor that impacted the bottom line was the US dollar’s appreciation over the Philippine peso,” it added.