Nickel Industries' June 2024 Quarterly Activities Report Highlights Resilience
NICKEL INDUSTRIES LIMITED (NIC) Share Update July 2024 Tuesday 30th
Nickel Industries Reports Resilient Performance Amid Challenging Conditions
Nickel Industries Limited (ASX: NIC) has released its June 2024 Quarterly Activities Report, showcasing robust performance despite facing challenging weather conditions.
Instant Summary:
- Nickel production increased slightly to 31,975 tonnes.
- Sales revenue rose to $368.1 million.
- EBITDA from operations totaled $79.5 million.
- Equity interest in ENC HPAL Project increased to 44%.
- New $250 million Indonesian bank facility established.
Production and Sales
Nickel Industries reported a slight increase in nickel production, reaching 31,975 tonnes in the June quarter, up from 31,840 tonnes in the March quarter. Sales revenue also saw a modest rise to $368.1 million, reflecting a 1.3% increase from the previous quarter. Despite the challenging wet season, the company's RKEF operations managed to maintain steady production levels.
However, the company faced higher operating cash costs due to increased nickel ore costs stemming from the heavy rainfall. The EBITDA for the quarter was $41.8 million, down from $48.2 million in the March quarter, primarily due to these higher costs.
HPAL and Mining Operations
The Huayue Nickel Cobalt Project (HNC) produced 19,968 tonnes of nickel and 1,785 tonnes of cobalt in mixed hydroxide precipitate (MHP). Nickel Industries' attributable share was 1,997 tonnes of nickel and 179 tonnes of cobalt. The project's EBITDA contribution for the quarter was $13.0 million, up from $11.2 million in the previous quarter.
The Hengjaya Mine, despite the heavy rainfall, produced 2,969,352 wet metric tonnes (wmt) of nickel ore. The mine's EBITDA for the quarter was $24.6 million, up significantly from $15.1 million in the March quarter.
Corporate Developments
Nickel Industries increased its equity interest in the Excelsior Nickel Cobalt HPAL Project (ENC) to 44% through two cash payments totaling $695.8 million. The company also established a $250 million, 5-year term loan facility with PT Bank Negara Indonesia and DBS Bank Ltd to support its acquisition and development activities.
Additionally, the company appointed Ms. Emma Hall as an Independent Non-Executive Director, bringing valuable experience in the global battery metals industry.
The increase in production and sales revenue, despite challenging conditions, demonstrates Nickel Industries' operational resilience. The strategic acquisition of a larger stake in the ENC project and the establishment of a new loan facility position the company well for future growth. These developments are likely to positively impact the company's stock price and investor sentiment.
Investor Reaction:
Analysts are likely to view the company's performance and strategic initiatives positively. The increase in production and sales revenue, along with the strategic acquisition and new loan facility, are expected to bolster investor confidence.
Conclusion:
Investors should keep an eye on Nickel Industries' continued performance and strategic initiatives. The company's resilience in the face of challenging conditions and its strategic growth plans make it a compelling investment opportunity.