FNI 1Q 2024 results reflect subdued nickel prices

By: Philippine Resources May 20, 2024

Global Ferronickel Holdings, Inc. (PSE: FNI), a leading nickel ore producer in the Philippines, reported first quarter 2024 revenues of ₱589.9 million, net income attributable to shareholders of ₱10.6 million, and earnings per share (EPS) of ₱0.0021.

Mining revenues were ₱586.2 million, down 47.4% from ₱1.1 billion in the prior year due to lower selling prices which more than offset higher sales volumes. The average realized nickel ore price dropped to US$27.42 per WMT, down 55.4% year-over-year from US$61.48 amid continued oversupply, predominantly attributable to Indonesia’s output of nickel pig iron (NPI) to China. Total shipments reached 0.381 million wet metric tons (WMT) of medium-grade ores, up 15.3% over prior year.

“In this uncertain environment, we are focused on boosting productivity and cost efficiency, which is critical to protecting value,” FNI President Dante R. Bravo said. “This includes optimizing our operations both in Surigao and Palawan, reviewing service contract rates, and reexamining planned capital investments. We are also working to improve our resilience to weather challenges, ensuring timely completion of projects, including flood control measures to reduce risks to operations and production arising from La Niña.”

Cost of sales amounted to ₱309.8 million, up 13.2% from ₱273.7 million, a reflection of higher volumes produced and shipped during the quarter. Operating costs, namely excise taxes and royalties, general and administrative, and shipping and distribution declined to ₱279.6 million, down 19.3%.

Net income attributable to FNI shareholders was ₱10.6 million, down 93.1% from ₱153.8 million. EPS was ₱0.0021 from ₱0.0296.

If we are going to comment on demand for NPI and Standard Steel, let’s make sure we are ready for any inquiries people (analysts, journalists, direct stakeholders) may have. When we reviewed market sources and the earnings releases of FNI peers — see the list of links Rachelle shared in WeChat — there were no explanations given about the continuing weak prices beyond persistent Indonesian exports.

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