August 8, 2024 – Global Ferronickel Holdings, Inc. (PSE: FNI), a leading nickel ore producer in the Philippines, reported first half 2024 revenues of ₱3.079 billion, net income attributable to shareholders of ₱207.1 million, and earnings per share of ₱0.0404.
“We finished the first half of the year with strong operational and cost performance,” FNI President Dante R. Bravo said. “We delivered incremental improvements in our supply chain including equipment productivity and technology integration, which increased production flexibility and cost efficiency. This continued execution positions us to maximize performance in the second half of the year as well as meet our near-term priority of doubling our capacity in Palawan to 3 million WMT from 1.5 million WMT annually.”
Six-month mining revenues were relatively flat year-over-year at ₱3.071 billion, despite achieving record sales volumes as prices remained subdued due to supply surplus in the nickel ore and nickel pig iron markets.
Total sales volume was 2.109 million WMT, 44.6% higher than 1H 2023, setting new records in line with production volumes, and demonstrating reliability in performance amid various operational scenarios and weather events. Of the total sold volume, medium-grade ores comprised a greater share over low-grade ores at 59% and 41%, respectively, compared to the corresponding share of 52% and 48% last year.
At Palawan, shipments reached 1.076 million WMT, 53.6% higher than 1H 2023, supported by recently expanded infrastructure, notably mine facilities and causeways, along with optimized processes in the areas of logistics and human resources. In the second quarter, it delivered 0.695 million WMT, the highest quarterly output since the project commenced operations in September 2022.
At Surigao, shipments rose to 1.033 million WMT, 36.2% higher than 1H 2023, as favorable weather conditions allowed production activities such as ore extraction and building of inventory to start in the first quarter, as planned. The improved availability of key inputs to production also contributed to volume growth, including chartered landing craft tanks for shipside loading of ores as well as transportation and handling equipment for mine operations and safety.
The average realized nickel ore price was US$25.35 per WMT, 33.9% lower than 1H 2023 and still well below the three-year historical average of US$32.25. Medium-grade ores had an average price of US$30.54 per WMT, down 40.5%, while low-grade ores sold at US$17.98 per WMT, down 25.5%.
On the cost front, cost of sales came in at ₱1.735 billion, 34.9% above 1H 2023, as a result of larger production and shipping volumes. This reflected a rise in contractor rates, particularly in Surigao, due to the change in sales mix and sources of nickel ore deposits, where the location affects the hauling distance and ultimately the mining cost. Additionally, operating expenses totaled ₱1.068 billion, up 16.1%. This increase mainly relates to revenue-based government excise taxes and royalties, as well as licenses, partially offset by lower stevedoring charges and shipping expenses. Overall, the total aggregate cash costs amounted to ₱2.512 billion. This translates to an average cash operating cost per volume sold of ₱1,191.2 per WMT, down 8.1%, benefiting from cost discipline, volume growth and mix, and operational efficiencies.
Net income attributable to FNI shareholders was ₱207.1 million, down 40.8%. On a per share basis, earnings were ₱0.0404 from ₱0.0676 the previous year.
About Global Ferronickel Holdings, Inc.
Global Ferronickel Holdings, Inc. (PSE: FNI) is a holding company whose principal subsidiary is Platinum Group Metals Corporation, the Philippines’ second largest nickel ore producer with mining assets in Cagdianao, Surigao del Norte and Brooke’s Point, Palawan. Through our presence across the Philippines and in China, we are pursuing a multi-pronged strategy to diversify our investment portfolio into value-added nickel processing, cement manufacturing, and port operations and logistics. For more information, visit gfni.com.ph or contact investorrelations@gfni.com.ph.
Forward-Looking Statements
This disclosure contains forward-looking statements that are subject to several risks and uncertainties that could affect the company’s business and results of operations. Although the company believes that the expectations reflected in this disclosure are based on reasonable assumptions, it does not guarantee future performance, actions, or events.