DMCI Mining Corp. reported a 19% decline in its net income in the first half, due to the lower average selling prices of nickel despite a 41% rise in shipments.
In a disclosure on Tuesday, the mining unit of listed conglomerate DMCI Holdings, Inc. said it booked a net income of P254 million in the first six months of 2019 versus P316 million during the same period last year.
Revenues were flat at P985 million, “as its shipment of mostly lower grade nickel commanded lower average selling price.”
Average nickel grade dropped 8% during the first half, while average selling price fell 28% to $28 from $39.
This is despite the company recording higher ore shipments to 681,000 wet metric tons (WMT) in the first half of 2019 from 483,000 WMT it shipped in the same period last year.
In the second quarter alone, the company shipped 343,000 WMT.
All shipments came from Berong Nickel Corp. (BNC), which has a nickel mining site in Barangay Berong, Palawan.
DMCI Mining said its other nickel site, Zambales Diversified Metal Corp. (ZDMC), has already complied with all conditions set by the Department of Environment and Natural Resources (DENR) for the lifting of its suspension order issued last November 2018.
“The Mines and Geosciences Bureau [MGB] reviewed the remedial actions taken by ZDMC last April 2019, and confirmed that all the specified conditions of DENR have been met,” said DMCI Mining President Cesar F. Simbulan, Jr.
“MGB has also recommended the lifting of the suspension. Hopefully, the DENR central office will reach a decision before the end of this year,” he added.
ZMDC was partially granted motion for reconsideration to resume its operations by reducing its closure order to an order suspending the operations, production, and shipment of the company.
Parent company DMCI Holdings reported 20% decrease in its net income to P3.8 billion in the second quarter of the year, flat revenues at P24 billion. This was due to lower coal prices and higher replacement power costs.
The diversified engineering conglomerate booked a 22% decrease in its net income in the first six months of the year, or P6.7 billion backed by P44-billion revenue.
The company incurred P2.3-billion replacement power costs in the first half of the year after the shutdown of Unit 1 of Sem-Calaca Power Corp. for its rehabilitation starting December 2018. Moreover, the 18% decline in average selling price of coal to P2,227 per metric ton also weighed on the company’s earnings.
Shares in DMCI Holdings went down 3.69% or 0.34 centavos to close at P8.88 apiece at the stock exchange on Tuesday. — Vincent Mariel P. Galang