Photo credit: Taganito Mining
Natural resources development company Nickel Asia Corporation logged an attributable net income (net of minority interest) of P7.93 billion for 2022, an increase of 1.5 percent from the P7.81 billion it reported in 2021, based on its audited financial and operating results.
Earnings before interest, tax, depreciation, and amortization (EBITDA) amounted to P14.31 billion against P14.42 billion in the prior year.
“Despite the inclement weather that affected our nickel mining business, 2022 remained a good year for NAC with prices for the metal buoyed by high demand. Our renewable energy business also made strides as it was able to increase its generational capacity and forge a partnership with an international player, Shell Investments B.V.,” said Martin Antonio Zamora, NAC President and CEO.
“The gains we made in 2022 show that we remain committed to our ambitious 2025 target of becoming the premier ESG investment in the country and top 25 in market capitalization of the listed companies in the Philippine Stock Exchange. This year will be no different as we continue to build a strong foundation to achieve our goals," he added.
Nickel Mining
The Company’s five operating mines – Cagdianao, Dinapigue, Hinatuan, Rio Tuba, and Taganito – sold a combined 15.94 million wet metric tons (WMT) of nickel ore during the year, a decrease of 11 percent from the 2021 level of 17.94 million WMT.
Despite the lower sales volume during the period, the higher nickel ore prices and favorable exchange rates raised the Company’s revenues by 2 percent to P28.03 billion from P27.40 billion in 2021.
The drop in sales volume was almost in direct proportion to unrealized workable days caused by unfavorable weather that adversely affected the Company’s mining operations during the period.
The weighted average nickel ore sales price during the period slightly increased to $29.17 per WMT against $29.13 per WMT in the same period last year. The Company realized P54.90 per US dollar from these nickel ore sales, an 11-percent increase from P49.48 last year.
Breaking down the ore sales, the Company exported 8.15 million WMT of saprolite and limonite ore at the average price of $39.39 per WMT during the year from 10.79 million WMT at $40.40 per WMT last year.
Likewise, the Company delivered 7.79 million WMT of limonite ore to the Coral Bay and Taganito high pressure acid leach (HPAL) plants, the prices of which are linked to the London Metal Exchange (LME) and realized an average price of $11.64 per pound of payable nickel.
This compares to 7.14 million WMT at $8.35 per pound of payable nickel in 2021. Expressed in US dollar per WMT, the average price for the deliveries to the HPAL plants were $18.72 and $12.03 in 2022 and 2021, respectively.
Owing to the higher LME nickel price during the period, NAC also recognized gains from its equity share in investments in the two HPAL plants in the combined amount of P942.1 million against P557.9 million the prior year.
Pujada Nickel Project
On Feb. 17, NAC disclosed that Hallmark Mining Corp. and Austral-Asia Link Mining Corp. accepted its Letter of Intent (LOI) to become the sole and exclusive contractor for two mine properties located in Davao Oriental.
NAC’s commitments under the LOI are subject to its conduct of due diligence and exploration activities, as well as the execution of definitive agreements among the parties.
Under the LOI, NAC or its wholly owned subsidiary will be the contractor for Hallmark’s mineral production sharing agreement (MPSA) that covers 4,999.71 hectares (ha) in Mati and San Isidro, Davao Oriental, and Austral-Asia’s MPSA covering another 5,000 ha in Mati and Gov. Generoso, Davao Oriental.
It also permits the conduct of a feasibility study to determine the economic and technical viability for the Company to establish an HPAL plant or an equivalent mineral processing plant within the MPSA areas.
Renewable Energy
Last June 2022, EPI successfully expanded Jobin-SQM Inc. (JSI) by another 38-megawatt peak (MWp), bringing the Sta. Rita, Subic site’s total solar generation capacity to 100 MWp.
For 2022, JSI increased generation by 56 percent to 114,824-megawatt hours and revenues by 79 percent to P609.52 million. Higher revenues and effective cost management kept EBITDA margin at 86 percent and resulted in a 756-percent increase in net income to P146.03 million. As of November 2022, JSI was ranked for three consecutive quarters first among large-utility solar generators in Luzon in terms of compliance with the Forecast Accuracy Standards of the Wholesale Electricity Spot Market (WESM).
In September 2022, JSI began developing and constructing an additional 72-MWp farm in Sta. Rita, Subic, which is scheduled to go online by 4Q 2023.
Moreover, EPI secured another long-term lease agreement with the Subic Bay Metropolitan Authority (SBMA), where it plans to build a 130-MWp plant. Pre-development activities started this year, with construction expected to begin in early 2024.
In July 2022, EPI also entered into a 60/40 investment and development agreement with Shell Overseas Investments B.V. to build 1 GW of onshore solar, onshore wind, and battery storage capacity by 2028, and potentially 3 GW thereafter. This new company, named Greenlight Renewables Holdings Inc., is slated to launch its first project of 240-MWp in 2023.
Sustainability
Based on the latest assessment of its external ESG rating partner Sustainalytics, NAC was able to improve its Environmental, Social, and Governance (ESG) performance after earning an ESG risk score of 33.6 – an improvement on its previous rating of 43.7.
NAC improved its risk score by 10.1 points, and now ranks 54th out of 210 firms assessed by Sustainalytics under the Diversified Metals category and 37th out of 174 firms under the Diversified Metals Mining sub-industry.
This also puts NAC under the “High Risk” category from a “Severe Risk” category. A “High Risk” rating is garnered by a company with risk scores between 30 and 40 while a “Severe Risk” rating is for firms with risk scores of 40 above.
Regular Cash Dividend
The NAC Board of Directors approved the declaration of a regular cash dividend of P0.17 per common share payable on April 12, 2023, to shareholders of record on March 29, 2023.
Article courtesy of the Philippine Stock Exchange
