Global Ferronickel Holdings, Inc. (FNI) has announced net income of ?148.8 million for the period January to June 2017 as against a loss of ?317.5 million in the same period last year.
Earnings before interest, tax, depreciation and amortisation amounted to ?397.6 million and revenue grew by 164% year-on-year to ?1861.6 million. The turnaround reflects strong volume growth, improved operational efficiencies and recovery of nickel prices.
Despite facing more rainy days this year, shipped volume reached 1.9 million WMT in the first six months, up by 76% in the same period last year mainly due to equipment productivity and improved business management. Product mix was 63% low-grade ore and 37% medium-grade ore versus the previous years’ mix of 81% low-grade and 19% medium-grade ore. This resulted to an average realised price of US$19.44 per WMT, which is 44.2% higher over the average price in the first half of 2016. In addition, the company was also successful in managing costs and bringing down cash operating costs by 17% per volume sold.
“We are delighted to see that the measures we have put in place have begun to bear fruit,” said FNI President Atty. Dante R. Bravo. “During the period, we achieved two significant milestones – a record high shipment for the month of June amounting to 1.1 million WMT which is the highest in our 10-year history and it represents a 30% increase compared to our average June shipment in the past three years; and the highest-ever production loaded in one day of 48 068 WMT. With these positive results, we expect to finish strong and hit our 6 million WMT target for the year.”
Declining inventory levels for nickel ore at China’s major ports support near-term prospects. Following the destocking in the previous months, nickel prices at the London Metal Exchange rebounded by 13% on average and nickel ore prices at the Shanghai Metals Market by as much as 68% from a year ago.
The medium to long-term outlook is also fundamentally positive driven by strong growth in fixed assets investment in real estate, infrastructure and continued development of new energy vehicles. With the recent announcements by leading car manufacturers to increase mass production of electric vehicles, there is a growing realisation that the disruption in the auto sector is likely to be felt faster than expected. And that it may just be a matter of time before the market starts to recognise its impact on nickel and price it accordingly.
Read the article online at: https://www.worldcoal.com/handling/15082017/global-ferronickel-holdings-inc-records-profits-of-p1488-million-in-1h17/