GLOBAL Ferronickel Holdings, Inc. (FNI) saw a 51.82% drop in its 2024 attributable net income to P743.9 million from P1.54 billion a year earlier, mainly due to lower revenues and higher costs.
Revenue from contracts with customers fell 13.37% to P7.61 billion from P8.79 billion in 2023, the company said in a statement to the stock exchange on Wednesday.
The company said it saw “lower nickel ore prices, partially offset by strong volumes.”
“By mine site, Surigao revenues decreased 3.1% to P4.667 billion (61% of total revenues), and Palawan revenues decreased 25.9% to P2.925 billion (39% of total revenues),” it noted.
“By geography, shipments to China made up 93% of revenues followed by Indonesia at 7%,” the company added.
The decline in revenue was accompanied by a 13.29% rise in the cost of sales to P4.07 billion from P3.59 billion.
As a result, gross profit dropped 31.81% to P3.54 billion from P5.19 billion a year ago.
Operating expenses rose 8.04% to P2.59 billion, driven by higher general and administrative costs, which surged 23.1% to P1.41 billion from P1.15 billion.
Excise taxes and royalties declined 6.96% to P791.93 million from P851.17 million, while shipping and distribution costs slipped 3.28% to P384.4 million from P397.43 million.
FNI’s total comprehensive income for the year stood at P786.76 million, reflecting a 56.78% decrease from P1.82 billion in 2023.
“While market conditions are beyond our control, we are laying a strong foundation for the future by funding growth and unlocking efficiencies,” said FNI President Dante R. Bravo.
“In 2024, we sustained double-digit volume growth, reduced our average cash operating cost per volume sold, and reinvested back in the business. Looking ahead, we will build on these achievements as we continue to advance on our strategy to capture new revenue streams and deliver profit growth,” he added.
The company said the average realized nickel ore price fell to $24.26 per wet metric ton (WMT) last year, down 27.1% from $33.28 a year earlier.
Low-grade ores sold for an average of $19.58 per WMT, down 23.9%, while medium-grade ores were priced at $33.06 per WMT, down 29.1%.
“Various factors affected market prices, including but not limited to: demand fluctuations in China and Indonesia, stainless steel and low-grade nickel pig iron production, supply chain disruptions from maintenance shutdowns of some steel mills, and the supply growth in Indonesia which outweighed production cuts and mine closures in the rest of the world,” the company said.
“Total volume shipped rose to 5.448 million WMT, up 15.5%, with growth in both Surigao and Palawan mine sites. This increase was fueled by investments to expand production and improve productivity,” it added.
It noted that sales of low-grade ores grew 18.1%, making up 65% of total volume, up from 64% in 2023, while sales of medium-grade ores increased 11%, accounting for 35% of total volume, down from 36% a year ago.
At the same time, the company said its capital expenditures (capex) spending reached P1 billion, up 15.6% from P869 million in 2023, representing 13.2% of revenue.
For 2025, the company has allocated P711.8 million for capital expenditures.
“Strategic priorities include the development of existing mines and expansion of resources, with ongoing exploration permit applications in North Luzon, Eastern Samar, Camarines, and additional areas in Surigao. It also covers further investments in warehouse and container terminal in Bataan as well as pursuing value-added nickel processing, primarily ferronickel and battery-grade nickel facilities,” the company said.
The company also said it expects to increase its revenues with a double-digit growth rate this year.
“The significantly higher production capacity in Palawan (from 1.5 million WMT to 3 million WMT) combined with the increase in productivity in Surigao and improved contribution from port operations in Bataan will be the main drivers of the expected top-line growth,” it said.
“In response to input cost inflation, the company is intensifying its efficiency program through increased production volumes, process and cost optimization, and innovation to firm up profitability,” it added. — K.A.T. Atienza