Ferronickel Holdings, Inc. (FNI) saw a 36.6 percent drop in their earnings from P 779,7 million in 2017 to P 509.5 million in 2018 which the mining firm attributed to a tax increase and higher operational costs.
It was stated by FNI that the 200 percent increase in local business taxes added with the new excise tax of 4 percent from 2 percent affected its reported earnings for the recently concluded year.
However, FNI still has a positive perspective of their output for 2018 saying it held its ground despite challenging market conditions due to a decision the management had to make last year.
The continued weakness of nickel ore prices last year urged the company to underwent a shift to selling higher grade ores and favorable foreign exchange rate.
“We have proven time and again that our organization remains resilient to withstand changing regulatory landscape, tax regime, and market conditions,” Dante R. Bravo, FNI’s president, was quoted in a Business World report.
FNI’s recorded sales of nickel ore in 2017, P 5.81 billion, fell 5.7 percent to P 5.48 billion in 2018.
A 4.4 percent decrease in their nickel ore shipment reflects the firm’s sales, shipping a total of 5.7 million wet metric tons (WMT) last year – 200 million less than 2017’s 5.97 million.
According to the company, 47 percent of their shipped output in 2018 was comprised of low-grade ore with the remainder being 53 percent medium-grade. FNI had 61 percent low-grade ore and 39 percent medium-grade ore shipped in 2017.
FNI’s average realized price also slipped by 6.3 percent which the company claims to be just a tad amount of a shrinkage considering the price of medium-grade nickel ore and low-grade nickel ore dropped by 8.7% and 18.4% year on year respectively.
Meanwhile, Mines and Geosciences Bureau’s strict requirement alongside its new Temporary Revegetation Program (TRP) led FNI to spend P 56.2 million last year, compared to P 42.4 million in 2017, for their company’s Environment Protection and Enhancement Program (EPEP).
The FNI, nevertheless, consider this insignificant to the decline in their 2018 earning as the EPEP’s cost for said year was “tempered by the decrease in royalties to claim owner and the reduction of contract hire expenses following re-negotiation with mining contractors.”
