Nickel Industries (NIC) Q2 2024 TU earnings summary

Executive summary

• Achieved US$79.5M EBITDA from operations in the June quarter despite challenging wet season conditions, with stable RKEF nickel metal production and improved performance at Hengjaya Mine.

• Increased equity interest in ENC HPAL Project to 44% through significant cash payments, supporting accelerated construction and commissioning.

• No lost time injuries recorded during the quarter, with a 12-month rolling TRIR of 1.89, and continued focus on sustainability and community initiatives, including a university scholarship program for indigenous students and top CSR recognition.

• Appointed Emma Hall as Independent Non-Executive Director, bringing significant battery metals industry experience.

Financial highlights

• RKEF operations produced 31,975 tonnes of nickel metal, with EBITDA of US$41.8M, down 13.3% from the March quarter due to higher rainfall, increased ore costs, and lower tonnes sold.

• Hengjaya Mine EBITDA reached US$24.6M, up 62.9% from the March quarter, rebounding from earlier licensing delays.

• HPAL operations contributed US$13.0M attributable EBITDA, up from US$11.2M in March quarter.

• Group cash and cash equivalents at 30 June 2024: US$358.1M, down from US$553.3M at 31 March 2024.

• Realised NPI contract pricing increased 2.8% from the March quarter as prices recovered.

Outlook and guidance

• Focused on delivering a strong second half as the dry season begins, with July mine sales at near record levels.

• ENC HPAL project commissioning expected ahead of October 2025, potentially accelerating cashflows.

• Anticipates ramping up mine output to 22 million tonnes in sync with ENC HPAL commissioning in the second half of next year.

• US$250M term loan facility established to support further ENC HPAL Project investment and acquisition of a 55% equity interest.

• Hengjaya Mine remains on track for 12 million wmt production in 2024 despite weather disruptions.