Nickel Industries Boosts Profit 81%, ENC Project Nears Commissioning

Financial Performance Highlights

Nickel Industries Limited has reported a significant improvement in profitability for the six months ending 30 June 2025, with profit after tax rising 81% to US$25.5 million compared to US$14 million in the prior corresponding period. This increase comes despite a slight 1.6% decline in sales revenue to US$829.7 million, reflecting a challenging nickel price environment and operational cost pressures.

The company’s adjusted EBITDA reached US$159.3 million, supported by contributions from its core operations – US$78.3 million from the Rotary Kiln Electric Furnace (RKEF) projects, US$27.1 million from High Pressure Acid Leach (HPAL) operations, and US$70.3 million from mining activities at the Hengjaya Mine.

Operational Progress and Production Metrics

Production volumes remained strong, with 66,450 tonnes of finished nickel metal produced, including 62,257 tonnes from NPI and 4,193 tonnes attributable from MHP. The Hengjaya Mine delivered 11.6 million tonnes of saprolite and limonite ore mined, with sales of 5.86 million tonnes during the period. The mine also achieved a 76% increase in adjusted EBITDA compared to the previous year, driven by higher volumes and cost efficiencies.

However, nickel ore grades experienced a slight decline due to mining lower-grade pit areas, though grades are expected to improve with the opening of higher-grade zones. The company is actively pursuing approval to increase the mine’s annual sales quota from 9 million to 19 million tonnes, a critical factor for sustaining production growth.

Excelsior Nickel Cobalt Project Nears Commissioning

Construction at the Excelsior Nickel Cobalt (ENC) project has advanced significantly, with all major equipment installed and staged commissioning underway. The integrated refinery and HPAL smelter are progressing well, though commercial sales are pending the issuance of an industrial business license (Izin Usaha Industri), expected in the first quarter of 2026. This milestone is crucial for transitioning the project into full operational status and generating positive cash flows.

Dividend and Shareholder Initiatives

Reflecting confidence in its financial position, Nickel Industries declared a final dividend of A$0.015 per share for the 2024 financial year and introduced a Dividend Reinvestment Plan (DRP), allowing shareholders to reinvest dividends into additional shares. During the period, the company issued over 50 million shares under the DRP, supporting shareholder value and capital management.

Sustainability and Safety Achievements

The company continues to lead in sustainability, with the Hengjaya Mine receiving its third consecutive Green PROPER rating from Indonesia’s Ministry of Environment and Forestry, highlighting its beyond-compliance environmental and social governance practices. Nickel Industries was also recognised in the Fortune Indonesia Change the World 2024 list, underscoring its commitment to responsible mining and community development. Safety metrics remain strong, with a low lost time injury frequency rate and ongoing focus on best practice standards.

Financial Position and Outlook

Nickel Industries maintains a solid balance sheet with total assets of US$3.84 billion and net assets of US$2.53 billion as at 30 June 2025. The company holds significant debt facilities, including senior unsecured notes and bank loans, with covenants currently met. Management is actively pursuing refinancing options to improve liquidity and extend debt maturities. Key risks remain around the timing of Hengjaya Mine’s sales quota approval and ENC project licensing, which are critical to cash flow forecasts and going concern assumptions.

Looking ahead, the company’s strategic focus remains on advancing its nickel projects, managing costs amid volatile nickel prices, and delivering sustainable growth for shareholders.