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Philex Mining profit drops in 2nd quarter

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PHILEX Mining Corp. saw a 13% drop in net income attributable to equity holders of the parent to P248.9 million in the second quarter due to lower metal output.

In a regulatory filing on Thursday, Philex said attributable net income in the first six months fell 23% to P551.7 million from P718.6 million during the same period last year. The company attributed this to lower revenues and wider foreign exchange losses this year.

Core net income in the second quarter went up 4% to P300.3 million compared with P289.3 million for the same period in 2017. For the first half, core net income fell by 13% to P646.3 million, “as a result largely of lower revenues, increased excise taxes, and higher non-cash production costs.”

During the second quarter, total operating revenues rose 3% at P2.274 billion, “as the effect of higher metal prices and foreign exchange rate outweighed the impact of lower metal production.” This brought total operating revenues for the first half to P4.646 billion, 2% lower than the P4.756 billion reported in 2017.

“As Padcal nears the end of its mine life, ore mined at the fringes registered lower grades,” Philex said.

The mining company said total ore milled from Padcal reached 2.19 million tons in the second quarter, up to two percent year-on-year. For the first six months, total ore milled hit 4.39 million tons, 6% higher year-on-year despite generating lower grade ores and producing less gold and copper.

Gold production in the second quarter dropped by 25% to 16,636 ounces, resulting in three percent lower revenues to P1.1 billion “despite higher average gold prices at $1,287 per ounce from $1,250 per ounce last year.”

Copper production during the April to June period fell by 2.33% to 7 million pounds. Despite the lower-than-expected output, copper revenues increased by 25% to P1.14 billion as average copper prices reached $3.12 per pound versus $2.58 per pound in 2017.

Philex Mining is one of the three local units of Hong Kong-based First Pacific Co. Ltd., the two other being PLDT, Inc. and Metro Pacific Investments Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls. — Anna Gabriela A. Mogato