DMCI Mining Corp. reported a 56% decline in net income for the third quarter on the back of fewer shipments.
In a stock exchange disclosure on Wednesday, DMCI Mining’s parent firm DMCI Holdings, Inc. reported that the unit’s net income reached P80 million in the third quarter, down from P181 million previously.
It cited the “combined effect” of a 50% fall in shipments, a flattish 1% decline in nickel grade sold, 31% higher selling prices, and a 10% rise in average foreign exchange rates.
For the nine months ending September, DMCI Mining’s net income dropped 17% to P1.17 billion from P1.41 billion due to lower nickel ore shipments and nickel grade sold.
“We expected a severe profit decline because of the depletion of our Berong mine late last year. Fortunately, the bullish nickel market allowed us to ship even the low-grade inventory of Berong,” DMCI Mining President Tulsi Das C. Reyes said.
“Strong nickel prices and local currency weakness also moderated the impact of lower shipments on our bottom line,” he added.
Overall shipments dropped during the January-to-September period as its Berong mine “did better than expected in the first half.”
The company said consequently, nickel ore shipments fell by only 25% to 1.09 million wet metric tons (WMT) from 1.45 million WMT. It added that in end-September, total inventory plunged by 76% to 109,000 WMT from 450,000 WMT, of which 81% came from Zambales.
DMCI Mining said that despite a 4% drop in the average nickel grade sold to 1.33% from 1.38%, it posted a 16% improvement in the nine-month average selling price to $50 from $43.
It said the impact of higher selling prices was magnified by a 10% increase in foreign exchange rates to P53 from P49 per US dollar. — Revin Mikhael D. Ochave