DMCI Mining Corporation (DMCI Mining) contributed P499 million in core earnings in the first quarter, up 20 percent from P415 million in 2021, despite zero production at its subsidiary Berong Mine. Mainly the following factors have contributed to the growth of its benefits:

1) Shipment volume increased. BNC's ample nickel inventory of 332,510 MWt and ZDMC's higher production translated into higher total shipments, resulting in a 26% increase in total shipments in the first quarter from 494,000 MWt to ​​620,000 MWt. Most of this (59%) came from ZDMC, whose shipments surged from 259,000 wet tons to 365,000 wet tons, an increase of 41%. Shipments of BNC increased by 9%, from 235,000 wet tons to 255,000 wet tons.

2) Favorable exchange rate. The Philippine peso fell 6 percent against the U.S. dollar from 48 to 51 to the dollar, boosting earnings for Philippine exporters.

3) The price of medium grade is increased. The global nickel supply shock pushed up the selling price of medium-grade nickel from $53/wet tonne to $72/wet tonne, an increase of 34%. At the same time, the selling price of lower-grade nickel fell by 10%, from $39/wet tonne to $35/wet tonne. No high-grade nickel (above 1.80%) was sold in the first quarter.

Additionally, DMCI reported the following:

1) Weak production. Nickel mine production plummeted from 555,000wt to 318,000wt, a drop of 43%, due to the depletion of the Berong mine in the fourth quarter of 2021. Production at ZDMC increased by 5%, from 303,000 wet tons to 318,000 wet tons.

2) Sold lower grades of ASP and nickel. The average nickel grade sold fell from 1.37% to 1.30% due to a 13% drop in BNC's sales nickel grade from 1.42% to 1.24%. Nickel grades sold by ZDMC were unchanged at 1.33%. As a result, the average selling price decreased by 6%, from $47/wet ton to $44/wet ton.

3) Inventory drops. Total nickel mine inventories fell 72% from 543,000 wet tons to 154,000 wet tons due to lower production and higher shipments.

4) Higher operating expenses and non-cash items. Operating expenses grew more than revenue due to higher fuel costs, marketing expenses, excise taxes and royalties. The former surged from PHP 193 million to PHP 263 million, an increase of 36%, while the latter rose from PHP 1.14 billion to PHP 1.42 billion, an increase of 25%. Non-cash items rose 65 percent from PHP 113 million to PHP 186 million due to higher shipments and depreciation of new equipment acquired last year.

5) Higher debt and cash levels. The company used the PHP300 million additional debt to refinance the previous loan at a lower interest rate. As a result, the debt level increased by 75%, from PHP 400 million to PHP 700 million, while the cash balance increased by 70%, from PHP 800 million to PHP 1.4 billion.