C05619-2018

SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C

CURRENT REPORT UNDER SECTION 17
OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER

1. Date of Report (Date of earliest event reported)
Aug 16, 2018
2. SEC Identification Number
ASO94-03992
3. BIR Tax Identification No.
003-871-592
4. Exact name of issuer as specified in its charter
Global Ferronickel Holdings, Inc.
5. Province, country or other jurisdiction of incorporation
Makati, Philippines
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
7F Corporate Business Center, 151 Paseo de Roxas cor. Arnaiz St. Makati City Postal Code 1228
8. Issuer's telephone number, including area code
(02) 519 7888
9. Former name or former address, if changed since last report
not applicable
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
common shares 6,072,357,151
11. Indicate the item numbers reported herein
9

The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.

Global Ferronickel Holdings, Inc.FNI

PSE Disclosure Form 4-31 - Press Release References: SRC Rule 17 (SEC Form 17-C)
Section 4.4 of the Revised Disclosure Rules

Subject of the Disclosure

Global Ferronickel Holdings, Inc. records profits of P3.98 million in the first half of 2018
Background/Description of the Disclosure

Manila, Philippines/ August 16, 2018. Global Ferronickel Holdings, Inc. (FNI) today announced net income of P3.98 million for the period January to June 2018 as against P151.76 million in the same period last year. Revenue fell by 23.2% year-on-year to P1,430.60 million due to the lower prices of nickel ore during the same period in 2017. The average realized nickel ore price for the first six months ended June 30, 2018 is US$17.59 per WMT compared to US$19.44 per WMT during the same period in 2017. Despite the decline in revenues, the Company managed to maintain its gross profit margin at 45%.

Shipment volume decreased by 19% to 1.55 million WMT in the first six months of 2018 from 1.91 million WMT in the same period last year. The decrease in shipment volume was due to the Company’s decision to shift its focus towards higher-grade nickel ores that required more preparation, especially in anticipation of such shipments for the second half of the year, in order to maximize profitability.

“It is the first time in the past several years that we are pushing for shipment of higher-grade nickel ores with 1.65% nickel content to take advantage of its relatively high price with better margin,” said FNI President Atty. Dante R. Bravo. “Despite a very challenging first half of the year, measures to boost operational efficiency and our ability to adapt to the changing market conditions continue to enable us to achieve positive results.”

The resulting product mix of 43% low-grade ore and 57% medium-grade ore in 2018 versus the previous years’ mix of 63% and 37% respectively, led to an average revenue per vessel of P51 million, which is just 4% lower compared to the same period in 2017.

The Company’s total cash operating cost per unit slightly improved by 3% year-on-year, notwithstanding the increase in excise tax on minerals that took effect on January 1, 2018, which doubled its rate from 2% to 4% of gross revenue. The improvement in operating costs is mainly attributable to the reduction in royalty and contractor rates that were renegotiated in the 2nd quarter of 2018. Another favorable factor that impacted the bottom line is the US dollar appreciation over the Philippine peso.

In the first quarter of 2018, Platinum Group Metals Corporation (PGMC),the Company’s operating arm in Surigao del Norte, signed supply contracts for the delivery of a total of 4.6 million WMT to Guangdong Century Tsingshan Nickel Industry Co. Ltd., Baosteel Resources International Co. Ltd., and Baiyin International Investment Ltd., which represent about 84% of its revised target shipment volume of 5.5 million WMT in 2018. Mining higher-grade nickel ore entails more processing activities which results in lower volume of shipment but would yield to higher average realized margin.

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Contact:

Luigi I. Avanceña: 0998-544-7046
[email protected]
Other Relevant Information

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Filed on behalf by:
Name Eveart Grace Pomarin-Claro
Designation Assistant Corporate Secretary, Alternate Corporate Information Officer