MBMA Q1 profit jumps on higher nickel ore sales, stronger NPI margins

By Rikordias Dominius

Nickel producer PT Merdeka Battery Materials Tbk (IDX: MBMA) reported a nearly fourteen-fold increase in first-quarter net profit, driven by higher nickel ore sales, improved selling prices and stronger margins from its nickel pig iron (NPI) business.

The company posted consolidated net profit of $82 million for the January-March period, compared with $6 million a year earlier, while earnings before interest, taxes, depreciation and amortization (EBITDA) surged 361% to $143 million from $31 million.

Revenue rose 24% to $455.1 million from $366.1 million in the first quarter of 2025.

Net profit attributable to owners of the parent company reached $29.9 million, reversing a net loss of $3.5 million a year earlier.

"We recorded a strong start to 2026, supported by higher nickel ore volumes, better selling prices and stronger NPI margins," President Director Teddy Nuryanto Oetomo said in a statement.

Nickel mining remained the company's main earnings driver, with ore production jumping 143% year-on-year to 7.7 million wet metric tons (wmt).

Limonite ore sales more than doubled to 4.8 million wmt, mainly supplying high-pressure acid leaching (HPAL) operations, while saprolite shipments rose 42% to 1.9 million wmt as the company increased supply from its Sulawesi Cahaya Mineral (SCM) mine to its smelters.

MBMA's rotary kiln electric furnace (RKEF) operations processed 2.2 million wmt of saprolite ore, producing 19,990 metric tons of contained nickel in the form of NPI, including low-grade nickel matte. NPI production and sales rose 23% from a year earlier following the completion of maintenance work in 2025.

Production of high-grade nickel matte increased 9% to 10,361 metric tons, although sales fell 19% due to shipment timing.

At PT ESG New Energy Material, MBMA produced 5,194 metric tons of contained nickel in mixed hydroxide precipitate (MHP), supported by improved ore deliveries following the completion of SCM's feed preparation plant and slurry pipeline to Indonesia Morowali Industrial Park (IMIP) in the fourth quarter of 2025.

The company also said construction of its HPAL project under PT Sulawesi Nickel Cobalt (SLNC) had reached 95% completion by the end of the first quarter, while the associated feed preparation plant was 94% complete.

The SLNC HPAL plant completed commissioning at the end of the second quarter and is awaiting an industrial operating permit (IUI), with production expected to ramp up gradually during the second half of 2026.

As of March 31, MBMA held cash and cash equivalents of $350 million. Total debt stood at $1.06 billion, with net debt of $710 million, resulting in a net debt-to-EBITDA ratio of 2.1 times, well below its covenant limit of 5.0 times.

For 2026, MBMA targets saprolite ore shipments of 8 million-10 million wmt and limonite ore sales of 20 million-25 million wmt. The company expects NPI production of 70,000-80,000 metric tons of contained nickel, high-grade nickel matte output of 44,000-48,000 metric tons and MHP production of 27,000-30,000 metric tons from its ESG HPAL operation, subject to government approval of its annual mining work plan and budget (RKAB).

MBMA said it expects performance to remain supported by rising nickel ore volumes, stronger margin visibility, increased self-sufficiency in ore supply for its RKEF operations and the expansion of its HPAL processing platform.

Editing by Reiner Simanjuntak