Nickel Asia Corp. (NAC, PSE: NIKL) has announced its audited financial and operating results for 2021 with attributable net income (net of minority interests) at P7.81 billion compared to P4.07 billion reported in 2020. Earnings before interest, tax, depreciation and amortization (EBITDA) amounted to P14.40 billion compared to P9.47 billion in the prior year.
“A defining year—that is how 2021 was for our company,” said Martin Antonio G. Zamora, President and CEO of Nickel Asia. “In the face of the second year of the COVID-19 pandemic and the continuing economic and social hardships it has brought to our country and our communities, we remained focused on our people and our business objectives, on our diversification into renewables through our subsidiary Emerging Power, Inc. (EPI), and we even crafted and adopted a new vision for our future.”
“At the same time the surging demand for nickel fueled by a doubling in sales of electric vehicles and strong growth in stainless steel production coupled with lower than expected nickel production, particularly out of Indonesia, resulted in a nickel deficit of about 150,000 tonnes rather than a projected surplus. This has clearly been a significant tailwind for the global nickel industry and for us,” he added.
The higher net income was the result of higher ore sales prices. NAC sold a total of 17.94 million wet metric tons (WMT) of nickel ore at the weighted average realized price of $29.13 per WMT in 2021, compared to 18.20 million WMT at $22.46 per WMT in 2020. Accordingly, total revenue increased by 26% to P27.40 billion from P21.77 billion in the prior year.
Breaking down the ore sales, the Company exported 10.79 million WMT of saprolite and limonite ore to customers in Japan and China at the average price of $40.40 per WMT in 2021. This compares to 10.02 million WMT at $33.99 per WMT in 2020. Likewise, NAC delivered 7.14 million WMT of limonite ore to the Coral Bay and Taganito HPAL plants, the prices of which are linked to the LME, and realized an average price of $8.36 per pound of payable nickel. This compares to 8.18 million WMT at $6.22 per pound of payable nickel in 2020. Expressed in US Dollar per WMT, deliveries to the two HPAL plants generated $12.11 and $8.33 per WMT in 2021 and 2020, respectively.
Following higher Nickel LME prices, the Company recognized a gain from its equity share in its investments in the two HPAL plants in the combined amount of P557.9 million in 2021, compared to P190.4 million in the prior year. Furthermore, due to the stronger US Dollar against the Peso, NAC recognized net foreign exchange gains from its US Dollar denominated net financial assets in the amount of P558.9 million in 2021, a major turnaround from net foreign exchange losses of P450.8 million in 2020.
Total operating cash costs increased by 11% year-on-year to P11.73 billion from P10.61 billion in the prior year. On a per WMT sold basis, total operating cash costs increased to P654 per WMT compared to P583 per WMT in 2020.
On the NAC renewable energy business under EPI, Jobin-SQM Inc. (JSI), an EPI subsidiary, is expected to complete its 38 MW project expansion by second quarter this year. This will increase the capacity of its Mt. Sta. Rita Solar Power Project located in the Subic Bay Freeport Zone to 100MW from the current 62MW.
In February 2021, JSI was awarded another 100 MW Solar Energy Operating Contract by the Department of Energy. JSI is currently in the pre-development stage and is looking to sign the EPC contract this year with a target of full commercial operation by 2024.
Aside from expanding JSI’s projects, EPI is in the process of developing land in high irradiance areas in the country to grow its investments in solar power generation. It is in the final stages of acquiring a solar power project in Visayas.
EPI is looking to reach 1,000 MW by 2028, adding about 500MW by 2025. It is likewise in search of appropriate sites for wind power projects.
INCREASED EQUITY SHARE IN CORAL BAY
The Board of Directors also approved the exercise by the Company of its option to purchase an additional 33,046,875 common shares in Coral Bay Nickel Corporation (CBNC) for US$25,937,500 under an Option Agreement with Sumitomo Metal Mining Co. Ltd. The Company intends to exercise its option in October 2022 or earlier, to increase the Company’s equity share in CBNC from 10% to 15.625%.
REGULAR AND SPECIAL CASH DIVIDEND
Finally, the NAC Board of Directors approved the declaration of a regular cash dividend of P0.17 and a special cash dividend of P0.05 per common share payable on April 7, 2022 to shareholders of record on March 24, 2022.