Nickel Industries (ASX:NIC) used its annual results presentation to highlight record production across several operating areas despite what Managing Director Justin Werner described as a “challenging year” for nickel pricing and mining quota delays in Indonesia.
Safety and ESG updates
Werner opened the call with safety performance, reporting 17.8 million safe man-hours worked during the year and more than 26.1 million man-hours since the company’s last reported lost time injury in 2021. He said the company’s LTIFR and TRIFR were “significantly below the world steel average.”
Financial results and RKAB-related impacts
The company reported revenue of $1.65 billion and adjusted EBITDA of $282.8 million for 2025. Werner attributed pressure on results to weaker prices, noting the LME nickel price was down 9.8% versus 2024 and the NPI price was down 2.8% versus 2024.
Werner also said Indonesia’s RKAB mining quota approvals and timing affected profitability, grade, and production volumes. He pointed to standby costs tied to quota constraints, including $1.5 million in standby costs to mining contractors late in 2024 that reduced fourth-quarter EBITDA, and later referenced about $21.3 million (also described as $21.5 million in Q&A) of standby charges in the December quarter related to RKAB extension timing. Werner estimated lost mining volume from the stoppage at roughly 4.5 million tonnes, translating to approximately $50 million to $60 million of lost EBITDA.
Nickel Industries paid a dividend of $0.015 per share in 2025. Net debt was cited at about $861.8 million during the presentation, with a balance sheet update at December 31 showing $357 million of cash, $1.2 billion of debt, and net debt of $866 million.
The company’s debt was described as comprising $800 million of notes maturing in September 2030 and $123 million of syndicated bank loan facilities, with an additional undrawn $50 million. Nickel Industries also recorded an $8.1 million impairment charge related to limonite inventory sterilized for construction of the ENC tailings facility.
Operations: RKEF, HPAL, mining, and ENC progress
Werner said Nickel Industries set multiple operating records during the year, including record nickel and cobalt tonnes from its HPAL operation (HNC), record NPI production of 1,055,658 tonnes, and record mine production of 19.2 million wet metric tonnes, with ore sales of 9.9 million wet metric tonnes.
- RKEF/NPI: Record NPI production of 1,055,658 tonnes. Cash costs declined 1.8% due to lower ore prices (linked to LME pricing) and lower power costs. The contracted price of $11,187 per tonne was lower than 2024, contributing to a decline in adjusted EBITDA per tonne by $261, which Werner said equated to about a 22% year-over-year drop.
- HPAL (HNC): Attributable production of 8,500 nickel tonnes and 802 cobalt tonnes. Werner said HNC was operating at around 40% above nameplate capacity. Cash cost increased slightly, largely due to higher sulfur raw costs. He said MHP contract prices rose 8% to about $14,990 per tonne and cited EBITDA per tonne margins of around $6,677 for 2025, with margins exceeding $10,000 per tonne in January.
- Mining: Mine operations delivered $91.6 million in EBITDA. Werner noted that while limonite nickel grade decreased, limonite contract pricing increased 31% due to demand from non-integrated Indonesian HPAL projects.
- ENC project: Werner said construction was progressing well and scheduled for commissioning in the first half of the year. He said an integrated refinery (for cathode and nickel/cobalt sulfate plants) was complete and the HPAL smelter was nearing completion. Mechanical tests had started on equipment including CCD circuits, thickening and precipitation tanks, slurry storage tanks, and reagent tanks, and the company had reallocated additional resources to support timely completion.
During Q&A, management said the company could not apply for the IUI (commercial production license) until mechanical completion and closure of investment capex by the government. First sales from ENC were “probably targeting somewhere around July,” with management describing typical residence times of 2-3 weeks from first ore feed to first HPAL product and about 40 days from feeding MHP into the cathode and sulfate refineries to produce refined products.
Refinancing, SeAH investment, and capital allocation
Werner described a bond refinancing in which Nickel Industries raised $800 million in five-year senior secured notes. He said the company reduced the coupon from 11.25% to 9% and removed amortization, adding that initial marketing targeted $500 million but attracted about $6 billion of orders. He also highlighted a more geographically diversified investor base, split roughly one-third each across North America, Europe, and Asia.
Werner also discussed the sale of a 10% interest in the ENC project to strategic partner SeAH, describing SeAH as a KOSDAQ-listed premium alloy supplier and “super alloy supplier to SpaceX.” Management said the transaction implied a $2.4 billion valuation for 100% of ENC, above the $2.3 billion Nickel Industries said it had invested.
In response to a question about the SeAH terms, management said SeAH’s investment consisted of $30 million in equity (paid in full as of the call) and $210 million in debt. Werner said Nickel Industries provided guarantees related to that debt and would step into SeAH’s position if SeAH defaulted. He added that Nickel Industries planned a further 2% increase in its ENC stake, with a remaining $46 million payment due by March 31, described as its final payment for ENC. Management said the structure also released $207 million of commitments the company otherwise would have made later in the year.
On capital allocation, Werner said near-term cash requirements included the remaining $46 million payment for the additional 2% of ENC and $20 million to $30 million of capex to progress the Sampala project, plus about $100 million of interest payments. He said the board would review capital returns and balance sheet priorities later in the year, including whether to revisit the dividend, consider a share buyback, and potential debt repayment, while continuing efforts to optimize the debt stack by lowering interest costs, reducing amortization, and pushing out maturities.
Outlook themes: quotas, price leverage, and catalysts
Werner pointed to what he called three major catalysts for 2026: increased RKAB quota at the Hengjaya Mine, commissioning and ramp-up of ENC, and development of the Sampala mine.
Management said it received approval for 14.3 million wet metric tonnes of ore sales for 2026. Werner said Nickel Industries was “the only company that has achieved an increase,” which he framed as an endorsement of the mine’s environmental and ESG track record. In Q&A, Werner said the quota would allow Nickel Industries to provide 100% of ENC’s ore requirements for 2026 and continue supplying saprolite to its RKEF operations at IMIP, bringing those operations to about 60% self-sufficiency. He also said the company does not currently supply ore to HNC, which is sourced from a third party.
Werner emphasized improved market conditions early in 2026, stating the company delivered $50 million in EBITDA in January, driven by higher NPI margins. He said NPI margins rose about 150% from roughly $1,114 per tonne in the December quarter to $2,800 per tonne in January, while also noting the company had “not yet captured that full NPI increase.”
He also described Sampala as progressing through haul road construction and permitting, noting the company drilled more than 100,000 meters in 2025 and said it was “very confident” of a resource exceeding 1 billion wet metric tonnes. Nickel Industries has an MoU for supply of up to 14 million wet metric tonnes of ore from Sampala, and Werner said remaining capex to bring Sampala into production was about $20 million to $30 million. In Q&A, Werner said an initial quota target for Sampala would be about 6 million tonnes, with ramp-up required to meet the 14 million tonnes contemplated by the MoU, and said the project consists of three separate IUPs, allowing multiple individual quota applications.
Closing the call, Werner said Nickel Industries believed it was “extremely well-placed” for a stronger 2026, citing strengthening NPI and nickel pricing and the expected ENC commissioning, while noting 2025 had been difficult due to what he described as the lowest nickel price in the past couple of years.
About Nickel Industries (ASX:NIC)
Nickel Industries Limited engages in nickel ore mining, nickel pig iron, cobalt, and nickel matte production activities. It is also involved in the production of mixed hydroxide precipitate for use in the electric vehicle supply chain. The company was formerly known as Nickel Mines Limited and changed its name to Nickel Industries Limited in June 2022. Nickel Industries Limited was incorporated in 2007 and is based in Sydney, Australia.
