Nickel Asia Corp. · PSE:NIKL
Nickel Asia — 1H 2023 Earnings Presentation
36 slides from Nickel Asia's earnings presentation, Aug 8, 2023
Slide 1: Nickel Asia Corp. 1H-2023 Earnings
NICKEL ASIA CORP. 2023 1H-2023 Earnings 08/08/2023
Slide 2: NIKL and EPI 1H2023 Highlights
2 NIKL and EPI 1H2023 HIGHLIGHTS NICKEL MINING RENEWABLE ENERGY (EMERGING POWER INC.) ▪ Revenues decreased by 8% YoY to P10.9 billion due to lower ▪ Jobin-SQM Inc. (JSI) now operating a total capacity of 100- nickel ore prices which weighed down the positive impact from MW from 62 MW YoY; generation
Slide 3: Financial Highlights (1H'23 vs 1H'22)
3 FINANCIAL HIGHLIGHTS (1H’23 VS 1H’22) Revenue (PHP bn) EBITDA (PHP bn) Net Income (PHP bn) Sale of ore 14.4 14.3 Services and others 27.4 28.0 21.8 9.5 17.9 7.8 7.9 6.5 6.5 10.9 11.8 4.8 4.1 3.83 2.7 1.70 2019 2020 2021 2022 1H23 1H22 2019 2020 2021 2022 1H23 1H22 2019 2020 2021 2022 1H'23 1H'22 2
Slide 4: Shipments and Revenues by Ore Type
4 SHIPMENTS AND REVENUES BY ORE TYPE FULL-YEAR COMPARISON Sales Volume (In mWMT) Average Ore Sales Prices Revenue (In PHPbn) (In US$/WMT) 11.1 -16% YoY 9.3 change -33% YoY change 28.2 4.1 3.86 Ore Exports 3.83 +1% YoY 42.2 3.6 -13.6% YoY Limo HPAL change -18.6% YoY 6.9 3.66 +17% YoY 16.7 5.7 -17.4%
Slide 5: Revenue – Variance Analysis
5 REVENUE – VARIANCE ANALYSIS FULL-YEAR COMPARISON Sales Volume (mWMT) 1H'23 +8% YoY change 7.51 1H'22 6.95 Sales Price (mWMT) 1H'23 -26.3% YoY 22.32 1H'22 30.28 FX Rate (PHP/USD) 1H'23 +2.3% YoY change 55.33 1H'22 54.07
Slide 6: Net Income – Variance Analysis
6 NET INCOME – VARIANCE ANALYSIS FIRST SEMESTER COMPARISON Net Income (In PHPbn) 3.8 4.0 3.5 ▪ Reported attributable net income at P1.7 billion, down 56% YoY due to lower ore prices in 2Q-23 impacting 3.0 both ore revenues and the profitability of our investments in the HPAL plants. 2.5 ▪ Excluding
Slide 7: Cost & Expenses – Variance Analysis
7 COST & EXPENSES – VARIANCE ANALYSIS FULL-YEAR COMPARISON Sales Volume (mWMT) 1H'23 +8% YoY change 7.51 1H'22 6.95 Fuel Prices (P/liter) 1Q'23 +3% YoY change 52.5 1Q'22 50.9
Slide 8: Investment in HPAL Equity Earnings
8 Investment in HPAL EQUITY EARNINGS Equity Earnings, in PHP Millions (1H-23 comparison) 1200.0 1092.8 1000.0 • The reduced Nickel and Cobalt prices had 800.0 impacted Equity earnings from investments in the HPAL operations 600.0 773.83 400.0 200.0 318.96 110.53 0.0 -187.59 -77.1 -200.0 -400.0 1H'22
Slide 9: JSI Financial Highlights (1H'2022 to 1H'2023)
9 JSI FINANCIAL HIGHLIGHTS (1H’2022 to 1H’2023) Generation (in MWh) Revenues (in PHP m) EBITDA (in PHP m) 76,375 390.63 330.82 49,554 216.29 177.77 1H’22 1H’23 1H’22 1H’23 1H’22 1H’23 1H’22 1H’23 1H’22 1H’23 1H’22 1H’23 1H’22 1H’23 YoY% change Presently operating at 100MW vs 62 MW in previous year G
Slide 10: Development Pipeline
om NAC DEVELOPMENT RiPELINE
Slide 11: Mining Development Pipeline
11 MINING DEVELOPMENT PIPELINE BULANJAO MANICANI KEPHA 70M WMT 47M WMT 6M WMT Resources as of 12/31/2021 @1.61% Ni @1.55% Ni @1.22% Ni 22% of 38% of 2% of Percent of MPSA Area Drilled 3,553 hectares 1,165 hectares 6,981 hectares Target Annual Production 4M+ WMT 2M+ WMT 2M+ WMT 35% Saprolite 50% Sapr
Slide 12: EPI's Solar Projects Under or to Start Construction in 2023
12 EPI’S SOLAR PROJECTS UNDER OR TO START CONSTRUCTION IN 2023 JSI Subic Cawag Leyte Project Operating Capacity 100 MW Capacity Under Construction 72 MW 145 MW 240 MW or For Construction The incremental Attributable capacity under construction 72 MW 145 MW 144 MW to EPI (in MW) Ongoing, Pre-developm
Slide 13: EPI's Geothermal Pipeline
13 EPI’S GEOTHERMAL PIPELINE BILIRAN (BGI) MINDORO (MGCP) Initially 50 MW (out P50 of 200 Capacity 20 MW (P90 of 20 MW) MW+) Attributable MW to EPI 22MW 20 MW Ongoing 90% Complete; 2 MW Vetted Proof of Concept Pilot Project Target Completion: with turbines to be installed 2Q 2024 Next phase: Finaliz
Slide 14: EPI's Projected Capacity Buildup of Solar, Wind and Geothermal
14 EPI’S PROJECTED CAPACITY BUILDUP OF SOLAR, WIND AND GEOTHERMAL GENERATION ASSETS • Load profile being developed to serve solar peak and night peak hours. • PSAs to be against portfolio (not single plant). • Does not yet include NAC-related projects.
Slide 15: Sustainability
Slide 16: ESG Score Improved to 34.8 from 43.7
16 ESG SCORE IMPROVED TO 34.8 FROM 43.7 Nickel Asia Corp. Rating Report Material ESG Issues Score and Risk Category Issue Name ESG Risk Exposure ESG Risk ESG Risk Rating Contribution to Score | Category Management Score | Category ESG Risk Rating 34.8 High Risk Community Relations 8.1 High Score | C
Slide 17: Our Sustainability Performance and Targets
17 OUR SUSTAINABILITY PERFORMANCE AND TARGETS ESG is at the forefront of our priority to address material risks with our medium- to long-term targets Our Sustainability Performance and Targets Highlights Completed Scope 1 and Scope 2 GHG inventory Metric 2022 Achievements 2025 Targets including Land
Slide 18: Our Sustainability Performance and Targets
18 OUR SUSTAINABILITY PERFORMANCE AND TARGETS ESG is at the forefront of our priority to address material risks with our medium- to long-term targets Our Sustainability Performance and Targets Highlights Metric 2022 Achievements 2025 Targets Zero (0) Lost Time Zero (0) Lost Time Safe Workplace 88.7
Slide 19: Our Sustainability Performance and Targets
19 OUR SUSTAINABILITY PERFORMANCE AND TARGETS ESG is at the forefront of our priority to address material risks with our medium- to long-term targets Our Sustainability Performance and Targets Highlights Metric 2022 Achievements 2025 Targets 33% Average Women 30% Average Women Active participant of
Slide 20: Recognitions in 2022
20 RECOGNITIONS IN 2022 PMIEA AWARDS Two of NAC mines were conferred the Presidential Mineral Industry Environment Award ▪ Platinum Achievement Award (PMIEA)—the highest award given by the President of the Philippines for the best in the Philippine mining industry. ▪ Platinum Achievement Award ▪ Tit
Slide 21: ESG in Our DNA
21 2022 ESG IN OUR DNA 1M Seedlings planted We deliver responsible mining and make a lasting impact to the communities and environment that we operate in. 73 Hectares land rehabilitated CREATION OF SUSTAINABILITY COUNCIL The Council is a management-level group tasked with 269 Hectares land reforeste
Slide 22: Q&A Submitted Questions
Q&A Submitted questions
Slide 23: Questions from First Metro
Ms. Cristina Ulang and Ms. Col Palumbarit of First Metro asks: How much of HPAL product as share of total revenues do you export to China? Recent data will do for these and for next questions. How much is total exports as share of total revenues? Percentage will do. What is the impact of China eco s
Slide 24: Questions from CLSA
Mr. Amos Ong of CLSA asks: 1. Any updates on Bulanjao and Manicani? Which quarter of the target year can the mines begin operations? Will all of the output be exported or will a portion be allocated to HPAL deliveries? 2. Given the oversupply of Indonesia to China, are there plans to redirect some o
Slide 25: Question from BDO Trust
Mr. Matthew Roxas of BDO trust asks: What are the company's plans given the extended rainy season that the country seemed to experience in the 2nd quarter of the year.
Slide 26: Live Q&A
Live Q&A
Slide 27: Appendix
APPENDIX
Slide 28: NIKL at a Glance
28 NIKL AT A GLANCE Largest producer of lateritic ore in the Philippines, 39% of Philippine nickel mine production and 5.6% of global nickel mine production in 2021, and through Emerging Power, Inc., is a forerunner in the Philippine renewable energy industry with aspirations to hit 1GW installed ca
Slide 29: Leading and Stable Mining Business
29 LEADING AND STABLE MINING BUSINESS Nickel Asia is the largest Philippine nickel ore producer … the Philippines largest established supplier. Philippines nickel mine production by major operator, Nickel Asia Ore output (In mWMT) (In kt Ni) 500 400 19.4 18.8 18.2 17.9 17.7 300 2.5 2.2 2.0 1.7 1.8 1
Slide 30: Ore Type Content
COUNTRY / ORE TYPE CONTENT FINAL PRODUCT USED IN TECHNOLOGY Japan: Ni: 1.3-1.5% FeNi 300-Series SAPROLITE FeNi or NPI Fe: <20% China: (10% Ni) Stainless Steel NPI (RKEF) HIGH Ni: 0.8-0.9% China: Low Grade NPI 200-Series FE Fe: 48-50% NPI (BF) (1-2% Ni) Stainless Steel LIMONITE LOW Ni: 1.0-1.2% Phili
Slide 31: Reserves and Mine Life
31 RESERVES AND MINE LIFE Nickel Asia has the largest nickel reserves and its mines have the longest remaining mine life in the industry Average mine life: 15
Slide 32: Renewable Energy
32 RENEWABLE ENERGY
Slide 33: Philippine Shift to Renewable Energy
33 PHILIPPINE SHIFT TO RENEWABLE ENERGY ▪ Demand growth of 6%+ p.a. until 2040, exceeding dependable capacity by 2024: 100,000 ▪ Key drivers of electricity consumption: Capacity and Peak Demand (2018–40) Macroeconomic recovery post- 80,000 60,000 pandemic and strong population growth MW 40,000 20,00
Slide 34: Investment into Renewable Energy
34 INVESTMENT INTO RENEWABLE ENERGY 1 The Philippine energy sector’s shift to renewable sources provides a favorable Jobin SQM, Inc. (JSI) market for us to grow our renewable energy capacity and is in line with our • 52% EPI, 38% NAC corporate culture of sustainability. Our dual growth strategy in m
Slide 35: Partnership with Shell a Significant Milestone
35 PARTNERSHIP WITH SHELL A SIGNIFICANT MILESTONE The Joint Venture Corporate Structure ▪ On July 1 , 2022, EPI and Shell signed a Joint Venture (JV) partnership to jointly develop, own, operate, and maintain onshore renewables projects in the Philippines ▪ Exclusive platform for utility scale grid-
Slide 36: Investment Parameters
37 INVESTMENT PARAMETERS In selecting sites, we follow these criteria: ▪ Irradiance, wind, or geothermal resources assessment are better than average ▪ Possessory rights are clear and robust ▪ Viable and cost-effective connection solution to the grid ▪ ESG best practices can be implemented Availabil