ASX nickel stock Nickel Industries Ltd (ASX: NIC) is in the green on the back of its 1H FY24 earnings report, while the rest of the market languishes in a sea of red on Thursday.
The Nickel Industries share price is currently up 1.21% to an intraday high of 84 cents.
The ASX nickel stock opened at an intraday low of 81 cents, down 2.4% on yesterday's close, before gradually lifting over the course of the day.
Meantime, the S&P/ASX All Ordinaries Index (ASX: XAO) is down 0.33% at the time of writing.
Let's check out the miner's report.
ASX nickel stock in the green despite profit crash
Lower production volumes and higher costs contributed to a 71% decline in profit after tax compared to the prior corresponding period.
Here are the key metrics for 1H FY24:
- Sales revenue: US$843.3 million in 1H FY24 vs. $932.3 million in 1H FY23
- Gross profit: US$96.3 million in 1H FY24 vs. US$126.4 million in 1H FY23
- Operating profit: US$87.8 million in 1H FY24 vs. US$117.3 million in 1H FY23
- Profit after tax: US$14 million in 1H FY24 vs. $49.1 million in 1H FY23
- Earnings before interest, tax, depreciation, and amortisation (EBITDA): $131.7 million in 1H FY24 vs. $141.8 million in 1H FY23
- Net assets: US$2,829.4 million as of 30 June vs. US$2,906.6 million as of 31 December
- Interim dividend of 2.5 AU cents per share unfranked and payable 18 September
What else happened in 1H FY24?
The Company's Hengjaya Nickel, Ranger Nickel, Angel Nickel and Oracle Nickel rotary kiln electric furnace (RKEF) projects produced a combined 63,814 tonnes of nickel metal equivalent.
The company said 62,071 of this was nickel in nickel pig iron (NPI), and 1,743 was nickel in nickel matte.
A total of 65,032 tonnes of nickel metal equivalent were sold, and EBITDA from the RKEF projects for the first half was $90.9 million.
In April, the ASX nickel stock shot 3.7% higher on news the company had completed the acquisition of a further 13.75% equity interest in the Excelsior Nickel Cobalt HPAL Project (ENC) for US$316.3 million.
Subsequent to the end of the period, the company acquired an additional 16.5% interest for US$379.5 million. This increased its interest in ENC to 44%.
What did Nickel Industries management say?
The company said RKEF operations during 1H FY24 were negatively impacted by a series of licencing, weather and maintenance issues that led to lower production volumes and higher costs.
During the March quarter, the delayed renewal of the Rencana Kerja dan Anggaran Biaya Indonesian mining licenses (RKAB License) led to lower production and the drawdown of lower-grade, higher-cost ore. This pushed nickel production below historical volumes, which translated into higher cash costs.
The RKAB License has now been granted for three years.
During the June quarter, above-average rainfall further impacted production volumes and the continued drawdown of lower-grade ore stockpiles.
Additionally, maintenance on the power stations led to the ONI power plant being offline for several weeks. This also contributed to lower-than-usual production volumes and higher cash costs at ONI.
What's next for Nickel Industries?
On Monday, the ASX nickel stock got a 1.2% boost after the company announced a major "world-class" acquisition.
Nickel Industries said it has signed a conditional share purchase agreement (CSPA) for the Sampala Project in Indonesia, which comprises three highly prospective, advanced, contiguous nickel mining licenses across 6,654 hectares.
ASX nickel stock share price snapshot
This ASX nickel stock is up 17.6% year to date and up 7.05% over the past 12 months.
