Harita Nickel Records Increase in Sales and Profits in the Third Quarter of 2023 amidst Challenging Market Conditions

Photo: Doc. Harita Nickel

JAKARTA – Despite the challenging world nickel market conditions, PT Trimegah Bangun Persada Tbk or Harita Nickel (NCKL), managed to record a high increase in sales and net profit for owners of the parent entity in the first nine months of 2023.

NCKL is an integrated nickel mining and downstream company that has upstream and downstream capabilities on Obi Island, South Halmahera, North Maluku.

In the third quarter of 2023, NCKL posted sales of IDR 17.3 trillion, up 135 percent compared to the third quarter of 2022 of IDR 7.4 trillion.

Apart from that, the Company was also able to record an increase in Net Profit for owners of the parent entity by 24 percent to IDR 4.5 trillion from IDR 3.6 trillion in the previous period.

The significant increase in sales is the result of the Company's efforts to continuously expand production capacity both from the mining business line, High Pressure Acid Leach (HPAL) refinery production, and the Rotary Kiln Electric Furnace (RKEF) smelter production line in the last 2 years.

An additional Mixed Hydroxide Precipitate (MHP) production line with a capacity of 18,000 tons of nickel content/year which has been completed by one of the Company's subsidiaries, namely PT Halmahera Persada Lygend (PT HPL), has successfully carried out commercial production since early 2023 and is successful reached full production capacity in just 2 months.

Thus, the total installed capacity of the three production lines owned by PT HPL currently has an installed capacity of 55,000 tons of nickel content/year.

Apart from that, another subsidiary, namely PT Harita Jayaraya Feronikel (PT HJF), which has eight production lines, has also been operating in stages since the beginning of 2023 and since August 2023, all of PT HJF's production lines have been running at full capacity. PT HJF has a Ferronickel production capacity of up to 95,000 tons of nickel content/year.

From the mining business, the Company recorded a significant increase in nickel ore production to meet additional demand due to an increase in production capacity from both PT HPL and PT HJF.

During the third quarter of 2023, NCKL's mining subsidiary has produced around 10 million nickel limonite ores and 4.4 million nickel saprolite ores.

From the HPAL refinery production line, since the addition of one production line, the Company recorded an increase in MHP production of 49 percent compared to the previous year's period, namely to 46,891 tonnes of nickel content.

Some of the MHP products that are produced are then converted into Nickel Sulfate and Cobalt Sulfate, which are the main raw materials for making ternary precursors, which are needed in making nickel-based electric vehicle batteries.

During the first nine months of 2023, the Company through its subsidiaries has produced 9,287 tons of Nickel Sulfate and 818 tons of Cobalt Sulfate.

From the RKEF smelter production line, the Company through its 2 subsidiaries, namely PT HJF and PT MSP, succeeded in recording total Ferronickel production in the first nine months of 2023 of 68,994 tons of nickel content, an increase of 268 percent from the previous year.

In the third quarter of 2023, PT HJF recorded a ferronickel production volume of 47,963 tonnes of nickel content.

Meanwhile, PT Megah Surya Pertiwi (MSP), recorded a production volume of 21,031 tonnes of nickel content in the nine months of 2023.

In the financial aspect, even though market conditions were full of challenges due to the decline in nickel prices on the world market, the Company managed to record a gross profit of IDR 6.1 trillion, or an increase of 63 percent compared to the first nine months of 2022 of IDR 3.8 trillion.

By continuing to innovate and be efficient in the Company's operations, Operating Profit increased by 59 percent to IDR 5.4 trillion from IDR 3.4 trillion in the first nine months of the previous year. Meanwhile, Profit for the Current Period even increased 60 percent to IDR 5.7 trillion from IDR 3.5 trillion for the same period in the previous year.

The company was also able to record Net Profit for parent entity owners of IDR 1.7 trillion in the third quarter of 2023, an increase of 25 percent compared to the same period in the previous year of IDR 1.5 trillion.

In the first nine months of 2023, the Company recorded a net profit for owners of the parent entity of IDR 4.5 trillion, an increase of 24 percent compared to the same period last year.

Seeing the increasing development of the electric vehicle industry globally and the government's plans to become one of the largest electric car battery producers in the world, the Company is committed to continuing to invest and build production facilities that can increase the volume and added value of the products produced by the Company.

Currently, the Company is carrying out further expansion by building a second HPAL facility through a subsidiary, namely PT Obi Nickel Cobalt (ONC), which is targeted to have 3 (three) production lines with a production capacity of 65,000 tons of nickel content/year MHP and is expected to operate continuously. gradually starting in the second quarter of 2024.

The company is also planning further expansion for the RKEF production line through an associated entity, namely PT Karunia Permai Sentosa (KPS), which is targeted to have 12 production lines with a production capacity of 185,000 tons of nickel/year (ferronickel) and is expected to operate in stages starting in the second half of the year. 2025.

In terms of sustainability, the Company will continue to be committed to carrying out sustainable integration in business processes, involvement and development of local communities, and the environment.

The Company will also continue to carry out consultations and discussions with relevant Stakeholders and Customers regarding the implementation of ESG standards and certification that will be implemented in the industry.