October 14, 2014

NIKL announces 9M14 shipment and revenue hikes

In a disclosure to the Exchange, Nickel Asia Corp (NIK)L announced shipment volume of 14.26m WMT of nickel ore for 9M14 which shows a 38% growth YoY primarily due to increased deliveries of limonite ore to the HPAL plants.

The higher shipments to the HPAL plants came after the Taganito HPAL commenced commercial operations in Jan 14 and is expected to contribute to full year’s earnings this year. The Taganito HPAL was still in pre-operating stage in October last year. As a result, total ore shipment to the two HPAL plants reached 5.38m WMT in 9M14, a 91% increase vs the 2.81m WMT shipped in the same period last year. Direct ore exports likewise increased by 18% to 8.87m WMT in 9M14 vs 7.50m WMT in the same period last year.

While total shipment volume increased by 38%, revenues from the sale of the ore more than doubled to P20.6b in 9M14 from P7.8b in the same period last year. This was due to the rapid rise in raw ore prices brought in the aftermath of the Indonesian ban on raw ore exports. As a result of said ban, average realized prices for both saprolite and limonite for 9M14 more than doubled to $46.72 per WMT from $20.96 per WMT in the same period last year.

Our take: Total revenues as of 9M14 are slightly ahead of our forecast and currently account for 94% of our full-year revenue estimates. The 3Q shipments are typically the strongest and this usually taper off in the succeeding two quarters as the country sees leas favorable weather. With the current revenue figures, we estimate the 9M14 net income to be close to P7.6b which will account for 93% of our full -ear net income figure for 2014. – WealthSec