March 25, 2014

NIKL’s 2013 net income drops 17% YoY

In a disclosure to the Exchange, Nickel Asia (NIKL) reported net income of P2.59b for 2013, down 17% YoY. The drop in net income is primarily due to lower world nickel prices last year which fell 14.7% to $6.91/lbs from $8.10/lbs in 2012.

Although NIKL managed to achieve record ore shipments, which rose 19% to 14m wet metric tons (WMT) from 11.7m WMT in 2012, this was not enough to offset the huge drop in world nickel prices.

Our take: We believe NIKL income is poised for a rebound in 2014. World nickel prices have started to recover, rising to $7.3/lbs yesterday from just $6.2 at the start of the year, after the implementation of the Indonesian ore ban in early January 2014.

We believe the recovery of nickel prices comes just at the right time as NIKL is poised to have another record delivery year this yearin addition to the commencement of the operations of the Taganito HPAL in which NIKL holds a 22.5% interest and its recent increase in stake in CBNC which rose to 10% from 6% previously. – WealthSec