Manila, Philippines/June 30, 2020. Global Ferronickel Holdings, Inc. (FNI), the country’s second-largest nickel ore producer, announced today a net income of ₱1.303 billion for 2019 as against the ₱509 million it posted the previous year. Revenues for the year ended December 31, 2019 totaled ₱6.655 billion compared to ₱5.487 billion in the year ended December 31, 2018. The 21.3% increase in revenues was attributable to higher nickel ore price and volume shipped. However, the increase was offset by
unfavorable exchange rate, which was lower by an average of 2.9%, compared to the previous year. The average realized Peso over US$ exchange rate for FNI’s export revenues stood at ₱51.65 as against ₱53.18 during the same period last year.
Due to favorable weather conditions and increased operational efficiency, FNI was able to complete 108 shipments of nickel ore during the year ended December 31, 2019 as against 103 shipments of nickel ore during the same period last year. The resulting product mix was 45% low-grade ore and 55% medium-grade ore in 2019 versus the previous year’s mix of 47% low-grade ore and 53% medium-grade ore. These shipments sold solely to customers in China consisted of 2.660 million WMT low-grade nickel ore and 3.230 million WMT medium-grade nickel ore compared to 2.658 million WMT low-grade nickel ore and 3.051 million WMT medium-grade nickel ore of the same period in 2018. The overall average realized nickel ore price for the year ended December 31, 2019 was US$21.87/WMT compared to US$18.07/WMT for the year ended December 31, 2018, higher by US$3.80/WMT or 21.0%.
“Our robust performance in 2019 reflects our management system and the key competencies of our workforce that we envisioned from the get-go,” said FNI President Dante R. Bravo.
The mining season of the Company’s Cagdianao mine is from March until October of each year. In the first quarter of 2020, the Company was able to complete one shipment of low-grade ore and recorded a net loss of ₱158 million as against one shipment of medium-grade ore and a net loss of ₱136 million during the same period last year. The higher net loss for the current period is due to the lower revenue brought about by the lower product type and thus lower price as compared to the same period last year. The mining season explains the quarter-to-quarter volatility in the operating results with more revenues being earned and more expenses being incurred during the second and third quarters compared to the first and fourth quarters of each year.
“Despite the challenges brought about by the pandemic, we continue to build on the success of last year and remain optimistic that we can meet our adjusted shipment target of 5 million WMT for 2020,” said Bravo.
On the long term, FNI’s strategy is designed to maximize the profitability of its existing base of operations while driving growth through continued exploration and development of the Cagdianao mine, expansion of its customer base, ongoing monitoring of value-added opportunities, particularly in downstream processing, and opportunistic acquisition of other suitable properties and businesses.