winph Global Ferronickel net income dives by 60.7% from Jan-Sept 2024
Global Ferronickel Holdings Inc. | PHOTO: Facebook page of Global Ferronickel Holdings Inc. (FNI)
Global Ferronickel Holdings Inc. saw its net income plunge by 60.7 percent in the first nine months of this year despite record sales as nickel ore prices declined.
In a disclosure on Friday, November 8, Global Ferronickel said net income attributable to shareholders slumped to P502.6 million in the January to September period from P1.6 billion in the same period in 2023.
Article continues after this advertisementRevenues decreased by 15.3 percent to P5.73 billion from P6.77 billion as “strong” sales volume fell short of delivering higher earnings for the mining firm due to lower nickel ore prices.
FEATURED STORIES BUSINESS Tesla in the Philippines: Cheaper model priced at P2.1M BUSINESS Global food prices reach 18-month high — FAO BUSINESS PSEi surrenders 7,000 on Trump winGlobal Ferronickel shipped 4.269 million wet metric tons (WMT) during the reference period, with both Surigao and Palawan mine sites posting increases.
Low-grade ores comprised 65 percent of the total while medium-grade ores accounted for the remaining 35 percent.
Article continues after this advertisementSurigao shipment rose by 16.7 percent to 3.164 million WMT due to favorable weather conditions and better equipment availability, including chartered landing craft tanks, transportation and water trucks.
Article continues after this advertisementREAD: Global Ferronickel’s H1 profit suffers from weak nickel prices
Article continues after this advertisementThe Palawan mine delivered 1.105 million WMT, up by 1.4 percent, driven by favorable weather conditions, the development of mine facilities and causeways, optimized logistics and human resources processes and increased equipment availability.
“For the first three quarters of the year, our shipment volume rose to the highest level since 2021,” Global Ferronickel president Dante Bravo said.
Article continues after this advertisementDespite this, the average realized nickel ore price dropped by 26.8 percent to $23.39 per WMT from $31.93 per WMT.
“Various factors affected market prices, including but not limited to: demand fluctuations in China and Indonesia, stainless steel and low-grade nickel pig iron production, supply chain disruptions from maintenance shutdowns of some steel mills, and the supply growth in Indonesia which outweighed production cuts and mine closures in the rest of the world,” the listed company said.
Aside from this, costs and expenses totaled P4.596 billion, rising by 13.1 percent.
READ: Global Ferronickel clinches supply deal with Baosteel
Cost of sales climbed by 13.6 percent to P3.162 billion because of the increase in production and shipping volumes as well as certain mandatory labor and social security costs.
Furthermore, operating expenses inched up by 9.7 percent to P1.947 billion mainly due to increases in royalties, taxes and licenses.
Even so, Global Ferronickel sees better business prospects with its forage into the Indonesian market and cost management.
“We expect this strong performance to remain towards the end of the year and over the course of next year, especially now that we have entered Indonesia, a new market for our low-grade and medium-grade nickel ore,” Bravo said.
The company executive also said Global Ferronickel is seen to benefit from prices which have firmed up month-on-month for low-grade nickel-low-iron ore products since September.
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“While it is not a significant acceleration yet, we believe our prudent cost and operations management positions us to stay profitable in changing market conditionswinph,” he added.
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