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Nickel Industries (ASX:NIC) has shrugged off rainfall-induced flooding at its Hengjaya Mine in Indonesia to forecast earnings (EBITDA) for Q1 CY25 at 20% above Q1 CY24 – largely because of improvements to a haul road.
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A Q125 earnings range of US$85-90M is expected compared to the most recent December quarter’s US$72M. (The March quarter of 2024 saw a similar read at US$71M.)
A total 2.6M wet metric tonnes (wmt) have been delivered in the quarter to date – compared to this time last year, when it was just 1.2Mwmt.
The answer here, of course, isn’t because nickel prices have improved, but rather floods only shut down Hengjaya for several days and most importantly that the project’s major haul road has vastly improved.
“Despite the recent heavy rainfall, improvements at the Company’s Hengjaya Mine haul road have been realised,” the company wrote on Tuesday.
“Despite significant above average rainfall and flooding in March at IMIP, the Company’s mine and processing operations have performed well … highlighting the continuous improvement that the Company continues to make at its operations,” NIC MD Justin Werner said.
Nickel Industries is one of few Australian ASX-listed nickel pureplays still treading water after largely Chinese-bankrolled Indonesian nickel supply shocked the world in the early 2020s when that latter country became the world’s number #1 player.
Since then, it’s been devastating for a wide swathe of companies. But Nickel has set up shop in Indonesia, and it’s backed by a major Chinese investor; Tsingshan Holdings.
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If you can’t beat them, join them, I suppose. The company earlier this year asked the Indonesian government for the right to sell 19Mtn a year, where previously it had been granted the right to produce 9Mtn.
NIC last traded at 60.5cps.
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