Low prices weigh on Nickel Asia H1 income

Earnings fall despite an increase in volume of shipments

Traders operate in the pit at the London Metal Exchange in central London. AFP PHOTO / SHAUN CURRY

MANILA, Philippines – Nickel Asia Corp.’s net income was cut by almost half in the 1st semester of 2013 due to lower nickel prices.

In a disclosure to the Philippine Stock Exchange on Tuesday, July 30, the country’s largest producer of lateritic nickel ore reported a net income of P645 million as of June 30, almost 50% lower compared to the P1.28 billion net income posted in the same period a year ago.

The drop in earnings despite an increase in the volume of shipments was due to lower nickel prices, the company said.

The company sold 5.54 million wet metric tons of ore in the 1st half of the year, an increase of almost 10% from the 5.02 million wet metric tons shipped in the same period of 2012.

“Notwithstanding global economic factors affecting prices of all commodities in general, we remain optimistic that our shipment volumes will continue to increase the 2nd half of this year,” said Gerard Brimo, the company’s president and CEO.

Some 1.97 million wet metric tons of ore the company sold in the first half were priced at $7.45 per pound of payable nickel in the London Metal Exchange, lower than the average $8.60 per pound in the same period of 2012. The rest of the shipments for the same period were sold at a lower average price of $20.14 per wet metric ton compared to $26.41 in the 1st half a year ago.

The company said its operating costs fell 10% to P2.65 billion in the 1st half from P2.96 billion last year. Production cost per wet metric ton also fell to $11.39 from $13.66 in 2012.

The company disclosed it has terminated the drilling in the Manmanok project in the province of Apayao, owned by its subsidiary, Cordillera Exploration Co. Inc., due to unsatisfactory results. Nickel Asia owns 71.25% of Cordillera Exploration.

“[We are] evaluating subsequent exploration programs in this and other claim holdings in northern Luzon that are prospective for copper and gold,” the company said. – Cherrie Regalado, Rappler.com

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