Key Highlights

• For the half-year ended 30 June 2026, the company reported sales Revenue of US$938.4 million, up 13% from US$829.7 million, according to a the update results published on 26 August 2026.

• Adjusted EBITDA was US$247.6 million, up 46%, and net profit after tax was US$74.3 million, up 191%.

• Profit attributable to shareholders was US$52.5 million, up 366%.

• Finished nickel production was 62,019 tonnes across the RKEF and HPAL operations, and more than 8.1 million tonnes of ore were mined at Hengjaya.

Why does the ramp-up of one processing plant matter so much to Nickel Industries (ASX:NIC)? Because the Indonesian producer is trying to shift from a Business built on nickel pig iron towards one that also sells battery-chain products, and the Excelsior Nickel Cobalt (ENC) high-pressure acid leach (HPAL) project is the clearest test of that plan. Its commissioning is progressing, but not without operational friction.

What the company does

Nickel Industries is an Indonesia-focused, vertically integrated nickel producer. It operates across three linked areas: Mining nickel ore at the Hengjaya Mine, converting ore into nickel pig iron (NPI) and related products through rotary kiln electric furnace (RKEF) lines, and, more recently, producing mixed hydroxide precipitate (MHP) and nickel and cobalt cathode through HPAL.

RKEF lines mainly serve stainless steel through NPI. HPAL processes lower-grade limonite ore into MHP, an intermediate feedstock for nickel and cobalt products linked to batteries. Revenue therefore depends on nickel prices, ore volumes, processing costs and, increasingly, cobalt.

The latest reported results

For the half-year ended 30 June 2026, the company reported sales revenue of US$938.4 million, up 13% from US$829.7 million, according to a the update results published on 26 August 2026. Adjusted EBITDA was US$247.6 million, up 46%, and net profit after tax was US$74.3 million, up 191%. Profit attributable to shareholders was US$52.5 million, up 366%. No Interim Dividend was declared.

Finished nickel production was 62,019 tonnes across the RKEF and HPAL operations, and more than 8.1 million tonnes of ore were mined at Hengjaya.

The September quarter update

The segments moved in different directions. Mining reportedly delivered record adjusted EBITDA of US$76.9 million, helped by ore sales of about 4.5 million wet metric tonnes and lower unit costs. RKEF adjusted EBITDA reportedly fell 33% to US$40.7 million, with scheduled maintenance on a line, higher costs after the government raised the nickel ore benchmark price, and a lower LME nickel price cited as factors.

Cash fell from US$268.3 million to US$145.9 million over the quarter, with Working Capital movements a major driver.

Why ENC is the central development

ENC is a 46%-owned HPAL project in Central Sulawesi.

It also reported a US$245 million project finance Facility led by OCBC, signed in October 2026, and an expected operating licence (IUI) in the fourth quarter of 2026. The company expects ENC sales once the licence arrives.

There have been operational hurdles. If the constraint persisted, ENC was expected to run at about 30% of nameplate, with normalisation anticipated by December 2026.

Sector conditions and competitive position

Indonesia is the dominant force in global nickel supply. Rapid capacity growth in recent years has weighed on prices and pressured higher-cost producers, and Indonesian authorities have been tightening oversight of output.

Its relative strengths are integration, because it owns an ore source feeding its own smelters, and its early move into HPAL, where limonite ore that would otherwise be a by-product becomes a saleable input. Its mine is also subject to an ore sales permit, known as an RKAB.

Against that, margins in a low-price market depend heavily on cost control and on regulatory settings, such as the ore benchmark price, which the company itself pointed to as raising costs.

Guidance progress

HPAL progress depends on the ENC licence.

Risks and what to watch

The main risks are visible in the reported numbers. Net Debt is substantial relative to cash. Nickel prices have been volatile and any weakness feeds directly into RKEF earnings. Regulatory changes in Indonesia, including permit quotas and benchmark pricing, can shift costs quickly. Water supply, commissioning delays and licence timing may affect ENC.

Upcoming developments include receipt of the ENC operating licence, any RKAB increase, the pace of ENC production, and further detail on the TMI and Chengsheng investments.