Nickel Mines (ASX:NIC) share price surges 6% on full-year earnings

Nickel Mines shares are performing well today due to earnings growth in 2021.

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Key points

  • Nickel Mines has released its earnings results for the full year 
  • Investors appear to have liked the results that came from an acquisition-heavy period 
  • In the past 12 months, the Nickel Mines share price has dropped by 2.7% 

Shares in Nickel Mines Ltd (ASX: NIC) are on the move today after the company released its financial results for the full year ended 31 December 2021.

At the time of writing, the Nickel Mines share price is trading 6.7% higher at $1.43.

Let's take a look at what has ASX investors excited about Nickel Mines today.

Nickel Mines share price spikes on earnings growth

Key takeouts from the company's earnings results today include:

  • Sales revenue US$$645.9 million, up from US$523.5 million in 2020
  • Gross profit came in at US$216.8 million, representing a substantial gain from US$165.1 million in 2020
  • Profit after tax US$176.0 million, up 14.5% year on year from US$153.7 million
  • 40,410 tonnes (32,328 tonnes attributable) of nickel metal produced in 298,353 tonnes of nickel pig iron
  • Acquired an 80% interest in the Angel Nickel RKEF Project
  • A record 2,457,694 tonnes of saprolite ore mined at the Hengjaya Mine
  • Execution of agreement to acquire 70% of the Oracle Nickel RKEF Project
  • A$100.6 million of dividends distributed to shareholders.

What else happened with Nickel Mines in 2021?

The company notes that 2021 saw Nickel Mines "continue on its rapid growth trajectory", charging towards completion of its Angel Nickel Project in Indonesia.

It also announced an investment into the Oracle Nickel Project in November, which Nickel Mines touts as "a new 4-RKEF line development project within the IMIP".

In its statement to the ASX, Nickel Mines said:

Oracle represents another highly value accretive investment for the Company and one which alongside ANI will see the Company's existing production profile more than triple current levels when fully commissioned, not to mention the transformative impact both projects will have on the Company's finances.

Aside from that, the group's Hengjaya and Ranger RKEF operations delivered a record EBITDA of US$224.9 million. This was underpinned by an annual output of circa 40,000 tonnes.

At the Hengjaya site, limonite supply commenced in November. From this, 98,313 tonnes of limonite were delivered to the Huaye Nickel Cobalt project. The EBITDA from mine operations was US$22 million.

The company also acquired the Siduarsi Nickel-Cobalt project and the Tablasufa Nickel project with Bolt Metals Corp (CNSX: BOLT). Also pending is the "eventual acquisition of the Pt. Adadi Nikel Nusantara and Pt. Sulawesi Nikel Abad nickel projects". All of these projects are located in Indonesia.

These results enabled the company to declare a final dividend of 2 cents per share, which was paid on 10 February.

Management commentary

Speaking on the results, Nickel Mines chairman Robert Neale said:

As always, I would like to finish by thanking you, our shareholders, for another year of support and belief in the company's vision to rapidly and responsibly build Nickel Mines into a globally significant nickel business. We are delighted to have been able to pay out 4 cents per share for 2021 and distribute to our shareholders some of the cash flows generated by operations.

What's next for Nickel Mines?

The company says the Hengjaya mine is on target to deliver a budgeted 3 million tonnes of saprolite ore production in 2022.

Nickel Mines also announced that Angel Nickel had entered its commissioning phase earlier this year. All four lines are anticipated to have commenced operations by the end of April 2022.

Nickel Mines told the ASX:

Responsibly managing our capital and the deployment of cashflows will again be a key objective for the Company in 2022, but with 8 RKEF lines coming online over the next 12 months and a growing contribution from Hengjaya Mine set to continue, we should all be optimistic for a prosperous 2022.

Nickel Mines share price summary

In the past 12 months, the Nickel Mines share price has fallen by 2.7%. Over the same period, the S&P/ASX All Ordinaries Index has gained 4.9%.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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