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Global Ferronickel Holdings, Inc. (PSE: FNI), a leading nickel ore producer in the Philippines, reported revenues of ₱5.732 billion, net income attributable to shareholders of ₱502.6 million, and earnings per share of ₱0.0981 for the first nine months of 2024.
“We continue to focus on operating efficiently and managing cost, while building and keeping momentum,” FNI President Dante R. Bravo said. “For the first three quarters of the year, our shipment volume rose to the highest level since 2021. 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. In addition to this positive development, we also saw prices firm up month-on-month since September for low-grade nickel-low-iron ore products, which have been our most sold product category by volume. While it is not a significant acceleration yet, we believe our prudent cost and operations management positions us to stay profitable in changing market conditions.”
Mining revenues were ₱5.718 billion, down 15.3% compared to the first nine months of 2023, resulting from a lower nickel ore pricing environment partially offset by strong shipment volumes.
The average realized nickel ore price declined to US$23.39 per WMT, down 26.8% from US$31.93 in the prior year period. Medium-grade ore prices averaged US$30.82 per WMT, down 35.4%, while low-grade ores sold at US$19.42 per WMT, down 21.0%. 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.
Total sales volume was 4.269 million WMT, up 12.3%, with growth across both Surigao and Palawan mine sites, reflecting prior and ongoing investments to expand production and improve productivity. Low-grade ores comprised 65% of total sales volume and medium-grade ores accounted for 35% compared to the corresponding share of 68% and 32% last year.
At Surigao, shipment volumes rose to 3.164 million WMT, up 16.7% against the prior-year level, due to favorable weather conditions and better equipment availability, including chartered landing craft tanks, transportation, and water trucks.
At Palawan, volumes were 1.105 million WMT, up 1.4% year-on-year, driven by favorable weather conditions, development of mine facilities and causeways, optimized logistics and human resources processes, and increased equipment availability.
Total costs and expenses were ₱4.596 billion, up 13.1%. Cost of sales was ₱3.162 billion, up 13.6%, in line with the rise in production and shipping volumes as well as certain mandatory labor and social security costs. Operating expenses totaled ₱1.947 billion, up 9.7%, mainly due to increases in royalties, taxes, and licenses partly offset by operational improvements and changes in freight contracts that resulted in lower stevedoring charges and shipping expenses. Overall, average cash operating cost per volume sold stood at ₱1,076.70 per WMT, which was only slightly higher by 0.7%.
Accounting for non-controlling interests and taking into account the net income of investment in associates of ₱192.0 million, net income attributable to FNI shareholders amounted to ₱502.6 million, down 67.6%. On a per share basis, earnings were ₱0.0981 from ₱0.3021 the previous year.
During the quarter, FNI also delivered on environmental protection, having recently constructed additional settling ponds and flood control structures at its Palawan mine as part of its erosion and sediment control measures. Other notable activities were progressive rehabilitation of mined-out areas, Adopt-a-River program in partnership with the Department of Environment and Natural Resources, and support for Social Development and Management Program particularly in education and health.