Nickel Industries Earnings Call Highlights

In a recent earnings call, Nickel Industries Limited (NIC (NASDAQ:EGOV).AX) reported steady production levels and upcoming strategic acquisitions to enhance resource capabilities. Managing Director Justin Werner discussed safety performance, environmental initiatives, and secured a $250 million loan facility. Although nickel metal production saw a slight decrease, record ore sales from the Hengjaya Mine were noted, with a strong performance expected in the second half of the year.

Key Takeaways

• Nickel Industries reported a 12-month Lost Time Injury Frequency Rate of 0.12 and a Total Recordable Injury Frequency Rate of 1.24.
• ESG score improved significantly to 37 from 7 in 2021.
• Nickel metal production decreased slightly to 30,663 tonnes, RKEF EBITDA was $60 million.
• Hengjaya Mine achieved record ore sales nearing 3 million tonnes, contributing $37.3 million in EBITDA.
• Conditional acquisition of Sampala Nickel project and a 51% stake in Sulawesi project with substantial nickel resources.
• Successfully syndicated a $250 million loan facility with global banks, and appointed Simon Miller as ENC HPAL Manager.
• Exploration of hedging strategies to manage foreign exchange volatility.

Company Outlook

• Expected approval for RKAB increase to 22 million tonnes by early next year.
• New project commissioning anticipated in the second half of the next year.
• Continued strong performance from Hengjaya and new projects forecasted.

Bearish Highlights

• Slight decline in nickel metal production from the previous quarter.

Bullish Highlights

• Record ore sales from Hengjaya Mine.
• Strategic acquisitions to boost production.
• Strong global bank support through a significant loan facility.

Misses

• No explicit misses reported during the call.

Q&A Highlights

• The company is exploring foreign exchange hedging strategies due to recent currency gains.
• Jefferies analyst Mitch Ryan questioned about foreign exchange strategies for future volatility management.

Managing Director Justin Werner closed the call with optimism, highlighting progress on the Sampala project and the beneficial developments in ENC construction. He expressed potential for improved nickel pig iron pricing as market shortages stabilize, suggesting that Nickel Industries is poised for robust future performance.

Full Transcript – None (NICMF) Q3 2024

Operator: Thank you for standing by. Welcome to the Nickel Industries Limited September Quarter Activities Webcast. All participants are in a listen-only mode. There will be a presentation followed by a Q&A session. Justin Werner: Thank you, and please advance to the next slide. Welcome to the Nickel Industries September quarterly activities results presentation.

Safety and Sustainability metrics include a 12-month Lost Time Injury Frequency Rate of 0.12, a Total Recordable Frequency Rate of 1.24, and three consecutive years shortlisted for the Green PROPER rating. Recent achievements include an S&P Global ESG score of 37 in 2024, up from 7 in 2021, and the development of a biodiversity area to protect local species.

Production was slightly lower at 30,663 tonnes due to maintenance; however, RKEF EBITDA was up 43% from the last quarter. Record ore sales from Hengjaya Mine reached $37.3 million in EBITDA. The conditional acquisition of the Sampala Nickel project enhances resource capabilities significantly, with a JORC-compliant resource of 2.3 million tonnes.

A $250 million loan facility, arranged by DBS and BNI, reflects confidence from banks, furthering the company's growth and reputation.

Q&A Highlights: Addressing a question from Mitch Ryan regarding FX strategies, the company acknowledged recent gains from currency changes and is assessing hedging options.

Justin Werner concluded by emphasizing strong expectations for a robust second half of the year, solid performance from Hengjaya, and the anticipation of high-margin product output from ENC.