Thank you, and thank you, everyone, for your attendance at the Nickel Industries 2025 half-year results presentation. If I could just ask the moderator to move to the next slide, please. We continue to play a leading role in responsible and sustainable mining. At the Hengjaya Mine, over 22.6 million work hours have been registered since our last LTI, which was over five years ago in November of 2021. Across group operations, 12-month lost time injury frequency rates, LTIFR at the end of June was 0.05, no lost time injuries, and that was against 4.6 million man-hours worked. For the 12 months to 30 June 2025, there were 18.6 million work hours registered with just one single LTI occurring. On the sustainability front, continued strong progress continues to be made.
The establishment of the Nickel Industries Foundation, which allows us to get even more embedded in Indonesia in social and economic development projects. These projects are focused on education, health, environment, and economic empowerment. We took a maiden intake for our first 10 university scholarship recipients, and they're performing very well at the university and achieving excellent results. Finally, we established one of only in Indonesia for nickel mining, a conservation and biodiversity area within our Hengjaya Mine concession, which will be used as an area to protect, promote, and study endemic flora and fauna species. If we could just move to the next slide, please. First half of 2025, adjusted EBITDA of $159.3 million, slightly above the first half of 2024, which was $155.7 million, and profit after tax of $25.5 million.
That was an 80% increase on the $14 million that was recorded in the first half of 2024. In terms of production, over 62,000 tons of nickel in NPI was produced and over 4,000 tons of nickel in MHP. Our RKEF EBITDA, $78.3 million, and I'll talk a little bit later on about RKEF EBITDA performance. The Hengjaya Mine has really been the standout, particularly for the first half of this year. Mine production in excess of 11.5 million wet metric tons. Mine adjusted EBITDA of $70.3 million, which is a significant improvement on the first half of 2024 as the mine continues to ramp up. We continue to focus on expanding our mine production with an increased RKEF from 9 million- 19 million tons, which is progressing well. We already have approval for a feasibility study.
Approval of the environmental study is in the final stages and imminent, and then that will allow us to further increase the RKEF at the Hengjaya Mine where we're making very strong margins. Finally, the mine also continues to be a leader in responsible mining, awarded our third consecutive Green PROPER rating, and over the next year or two, we'll be striving to achieve the coveted gold status. On other corporate matters, we continue to develop the world-class Sampala project with a lot of drilling. Over 160,000 m of drilling has been undertaken. We feel very strongly that that has the potential to host in excess of a billion wet metric tons, which at today's margin of sort of $10 to $11, you can start to appreciate the size and scale of that Sampala project.
A lot of work is already being completed in terms of haul roads, feasibility studies, and we look forward to bringing that into production next year. Very strong progress is being made at the ENC HPAL. The cathode plant has been completed. The sulphate plant, we're looking at completion around October or November, and finally the mixed hydroxide precipitate plant towards the end of this year. We will look to target production probably early in 2026. We are looking at options of, again, commissioning the cathode plant sometime in October or November just to bring that slightly forward ahead of schedule. If we could just move to the next slide, please. You can see the key metrics in the table here, and I'll just touch on a few of them. Gross profit, $114.8 million, up 19%. Operating profit, $98.7 million, up 12%. Profit after tax, up 81%.
What we had was we had lower EBITDA from our RKEF operations, and that was despite an improving NPI price, predominantly driven by higher costs. Those costs are related to shortages of ore and significant premiums being paid for ore. I think what it's highlighting is those companies with integrated operations, such as [RNI] , which has integrated ore supply, integrated power, are performing much better than those that don't. That's been the driver behind the decrease in RKEF EBITDA. Pleasingly, that's being more than made up for with a very strong performance from our Hengjaya Mine. Adjusted EBITDA has gone up 76% from $39.9 million to $70.3 million. This type of economics bodes very well for the development of the Sampala project, given very low capital base, but currently very, very strong margins.
Finally, pleasingly, we are seeing increased EBITDA from our attributable EBITDA from our 10% ownership in the HNC HPAL. That, again, bodes very well for the commissioning of ENC towards the end of this year. If you could just go to the next slide, please. In terms of the balance sheet, you can see that total liabilities have come down slightly, and that is due to some of our debt now amortizing. We are focused on a refinancing of both of our debt stack, as we do have bank and bond debt that is starting to amortize. The bonds start in October and the bank debt has already commenced. The focus of that refinancing will be to extend the tenor and lower the cost of money so that we can optimize the current debt stack.
In relation to that, we deferred our remaining payments for ENC of $126.5 million to January 1 and a further $126.5 million to April 1. That will allow us to benefit from two or three further quarters of production in EBITDA, but also gives us breathing space in terms of, as I mentioned, hopefully refinancing that debt stack and to remove a lot of that amortization and just to push out the tenor. If we could just go to the next slide, please. This is just an adjusted EBITDA to profit reconciliation, and you can see the impact there on FX losses, interest expense, depreciation, and amortization. Really, the bottom line is the net profit after tax, which, as I mentioned earlier, is up almost 80% from $14 million in the first half of last year to $25.5 million for the first half of this year.
If we could just move to the next slide, please. We had slightly lower production from our NPI operations this year. That was as a result of maintenance that's been undertaken. We had to realign some kilns after heavy rainfall and flooding, and there was also some maintenance undertaken across two of the power plants. The big driver in RKEF EBITDA has been that increase in cash costs that you can see there. That's gone from $9,716 to $10,117, and that's been driven by higher ore prices, where we're seeing premiums up to $25 above the market price. Pleasingly, we have seen an increase in the NPI price, which has gone from $11,290 to $11,350 and continues to be on a slight upward trend.
That increase in costs has led to a lower adjusted EBITDA and lower EBITDA per ton margins, which were down from $1,677 the prior year to $1,251. If we could just go to the next slide, please. HPAL operations continue to perform very well for the first half of 2025. Production was again above the first half of 2024, and HNC is now consistently operating at well above nameplate capacity. Cash costs have remained relatively stable. There has been a slight increase from $7,155 to $7,538, but the EBITDA ton per margin is sitting around or greater than $5,900 a ton. If you're looking at that HNC table, those numbers are $4,562. Remembering that this is HNC to Syncreation, the marketing company, there's a further margin of about $1,400 a ton from Syncreation, the marketing company, to the end buyer. Margins have remained stable, which we see as a positive.
You can see first half of 2024, combined EBITDA between HNC and Syncreation of 22.6. First half of 2025, that's up 20% to 27.7, so 27.1. This again bodes very well for ENC. Margins are holding up strongly in the HPAL space. If we could just move to the next slide, please. This is where I think we've seen the most pleasing improvement. We've seen adjusted EBITDA go from $39.9 million in the first half of 2024 to $70.3 million in the first half of 2025. That's up 76%. We are confident in being able to double and take these production numbers to the 19 million ton RKEF that we're targeting. Pleasingly, we have seen a reduction in costs, and that's probably being more driven by the larger number of volumes that are being sold and mined. So Hengjaya Mine remains a strong, consistent performer within the portfolio.
If we could just go to the next slide. Finally, our ENC project update. As I mentioned, cathode plant is now complete. We are potentially looking at commissioning that in October or November of this year. We did decide to defer it from the original date of July, just given the timing of the commercial sales license, which we would expect to receive in around January or early Q1. You can see from the photos there that all of the key equipment is pretty much fabricated and erected. It will be an exciting milestone towards the end of this year when we start to commission the ENC project. Overall, a robust first half performance despite a number of challenges and a continued soft nickel price. We're seeing very good results out of the Hengjaya Mine, and we're looking to double that production.
We obviously have the development of Sampala progressing very well, where we would expect to see similar numbers. RKEF is holding steady despite slight increase in costs. One of the aims of Sampala will be to bring self-sufficiency to our IMIP RKEFs, which should see a significant improvement in their EBITDA per ton margins. Pleasingly, as I said, the margins at HNC HPAL are holding up around $6,000 a ton, which bodes very well for first production out of ENC and is showing that significant EBITDA per ton improvement over RKEFs, where our better RKEFs, we're looking at sort of $1,700- $2,000 versus $6,000- $7,000 from our HPAL operations. With that, I'm happy to hand over to questions.
Thank you. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up your handset before you ask your question. Our first question is from Adam Baker with Macquarie. Please go ahead.
Hi, Justin. Morning. Thanks for the presentation. Maybe a question on the balance sheet, if I could. Just focusing in on that debt refinancing, I noticed in the slide pack you mentioned potential refinancing in the 4Q or the 1Q next year. Noting that you've got cash and cash reserves, $145 million, $228 million of current borrowings, and the $253 million of the ENC HPAL acquisition payments over the next seven months. I'm just wondering if you could talk us through what other levers have you got left that you could pull other than potential debt refinancing that you've flagged?
Yeah, thanks, Adam. I'll let Chris, do you want to take this on?
I can take that. Thanks, Adam. Adam, we've actually just entered into a commitment letter with two financial institutions for a $100 million loan facility that will support our near-term working capital requirements, and we expect to finalize the long-form binding facility agreement in the coming weeks. In parallel with that, it is correct that we are actively evaluating a range of alternative debt funding options to optimize the capital structure. As Justin mentioned earlier, these will enhance the company's credit profile and improve our liquidity through the refinancing of the existing senior unsecured notes and/or the bank facilities. As Justin mentioned, we're looking and we're focusing on extending the debt tenor, optimizing the amortization schedule or removing the amortization schedule, particularly out of the bond, and reducing our funding costs where possible. Other levers, obviously, there's a big lever in there being the ENC CapEx payments.
We will continue to have discussions with Shanghai Decent. No formal discussions have been had yet regarding pushing those payments back if they were actually required. The reason we haven't had formal discussions is we don't believe they're required based on how we're looking at our debt refinancing. However, if it did come to fruition that we needed it, we believe that Shanghai Decent still remains very supportive to the company, as they've shown throughout, I guess, our entire listed history.
That's great. Thanks for that. Maybe just secondly, on the dividends, I noticed that you've withdrawn that. Is that just a case of a proven balance sheet management, or how should we be thinking about how you guys think about the dividend moving forward?
I think you answered it yourself, Adam. It's prudent balance sheet management. Whilst we're looking to continue to keep the balance sheet strong and refinance, I don't think it's a sensible thing to be paying out money right now.
Great. Thanks, Justin and Chris.
Thanks, Adam.
Thanks, Adam.
The next question is from Jack Whelan with Citi. Please go ahead.
Hi. Morning, Justin and Chris. Two from me this morning. First one, do you have an update on the expected $110 million of VAT refunds, and do you have confidence in that coming in, and how should we think about the timing?
Yeah. Justin, I'll take that as well. Thanks for the question, Jack. We don't have any update on timing. I think I've said on our last call we're expecting it within the next 6 to 12 months, and that's still the case. We are in dialogue with the Indonesian government from time to time, and this is just their normal process, as you would have seen with other projects. It just takes a while to get the VAT through back from the government. We are very confident that it will come in within that time frame.
Thanks. I see you're awaiting final environmental study approval to get the RCAB for the Hengjaya Mine to go to 19 million tons per annum. What's the timing expectation for this and also Sampala getting to 6 million tons per annum?
Yeah. Timing on the RKEF is by the end of September. Timing for an RKEF at Sampala for $6 million is also end of this year.
Awesome. Thank you.
Once again, if you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. Your next question is from David Coates with Bell Potter Securities. Please go ahead.
Right. Thank you. Thanks, Justin and Chris, for your time this morning and the presentation. Quick one from me, I just want to know if you can give us a bit more background into the factors going into whether or not to commission the cathode plant at the ENC HPAL.
Yeah. Thanks, Dave. We did bring the construction forward to July of this year. The intention was that we would start commissioning then, although we understand that, and this is something that we've done in the past with RKEFs, the sales license actually doesn't come until full physical completion of the whole plant. It was our intention just to start to produce cathode and stockpile it in readiness for the IUI. Given the draw on working capital and the requirement to purchase MHP, which, at the moment, the payabilities are actually very high, it's really the draw on working capital, the high cost of MHP. We've just decided to delay that slightly. It just comes down to making sure we keep the balance sheet in strong shape.
We don't want to be drawing down working capital and then holding on to finished stock that we can't sell for a number of months.
No, understood. Have you brought it forward from January to October now? Is that, sorry, what was that?
Yeah, we are looking at October, November.
Yeah, cool. Okay. Thanks, Justin. Cheers.
Thanks, Adam.
There are no further questions at this time. I'll now hand the call back over to Mr. Werner for closing remarks.
Yeah. Thanks, everyone. I think, you know, despite continued nickel price challenges, companies performed very well, delivered a stronger EBITDA than the previous year, seeing very strong growth in the mining sector. We expect further growth there with an imminent release of an RKEF that requires no CapEx for that increase in mine sales. We have ENC commissioning just over the horizon where margins remain strong around $7,000 a ton. Look, that's it. Thank you, everyone.
This does conclude our conference for today. Thank you for participating. You may now disconnect.