Philippine nickel miner Global Ferronickel Holdings Inc. (GFNI) said Nov. 10 that its net profit for the first nine months of 2023 contracted 14.4 percent from a year earlier to 1.8 billion pesos as costs grew faster than revenue.
GFNI said in a report disclosed to the stock exchange that its sales in the first nine months rose 33.1 percent year-on-year to 6.8 billion pesos due to higher sales of the Palawan mine and its high-grade nickel ore, but this was partially offset by lower sales volumes. The Surigao mine was caused by bad weather and weaker prices for low-grade ore.
Total nickel ore sales in the first nine months also increased by 20.7 per cent to 3.801 million wet tonnes, of which 2.711 million wet tonnes came from Surigao and 1.09 million wet tonnes from Palawan. The sales mix was 68% low grade ore and 32% medium grade ore, compared to 78% low grade ore and 22% medium grade ore in the same period in 2022.
Average realized nickel ore prices also increased by 10.5% to $31.93 / wet-ton due to a more favorable mix and stronger high-grade ore prices.
With the opening of the Palawan Mine, contract rents, depreciation and consumption, and personnel costs increased, and the cost of sales soared 37.8 percent to P2.8 billion. Operating costs rose 7 percent to 1.8 billion pesos, mainly related to general and administrative expenses, while finance costs totaled 213.9 million pesos, consistent with the recognition of interest expense incurred from the acquisition of associate companies in 2022.
Dante R. Bravo, president of GFNI, said the company is focused on strengthening its business and improving asset diversification. "The company has made significant progress in its strategic plan with the purchase of five landing craft from 2024 to improve operational and cost efficiency in transporting nickel ore and the acquisition of additional land in the Bataan Free Port Zone to expand our operations."
