Shares in Indonesian-focused Nickel Mines were savaged on Tuesday, slumping 12% and more at one stage after the company’s March quarter report revealed lower than expected nickel sales and production.
The company said its operations in the quarter had been blighted by “a minor seismic event” in early January, which saw reduced power availability within its Indonesian Morowali Industrial Park.
The company said quarterly rotary kiln–electric arc furnace production was down 12.7% from a record 11,527 tonnes of nickel metal in the December 2020 quarter.
Total sales fell 10% to 10,257.1 nickel tonnes, with quarterly revenue dropping 13% to $US138.2 million ($A177 million).
Just a month ago share price was at record highs $1.535 on the ASX as investors rode it on the basis of the rising demand for nickel in the renewables/electric vehicle future.
But since then it has lost more than a third in value since then and touched a low of $1.075 on Tuesday afternoon, a four-month low.
The shares ended a rough day’s trading at $1.13, down 12%. Still a year ago the shares were around 46 cents, so even after Tuesday’s sell off, the gain has been significant.
While the first quarter for the company (and so many others dealing with Asia) took a hit from Lunar New Year holiday period with a fall in production levels, the company decided to use a lower quality ore feed to produce a slightly lower grade nickel pig iron (NPI).
Higher grade NPI currently attracts a price discount as it needs to be blended down to achieve an optimal composition for stainless steel producers.
The company said it saw record monthly nickel ore production of 182,720 wet metric tonnes in March
The company said it had $US 277.4 million in cash and receivables on hand at the end of the quarter, down 46.4% from $US517.9 million in the December quarter following $US180 million payment for a 50% stake in Angel Nickel, $US45 million debt repayment and $US38.8 million dividend payment.
