Philex Mining earnings drop by 49% in first nine months

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Philex Mining attributes decrease in net income to lower grade output and production, as well as higher income taxes.

 

By Anna Gabriela A. Mogato

Philex Mining Corp. saw its net income attributable to parent company drop by 49.65% to P569.89 million in the first nine months of 2018 (as compared to P1.132 billion in the first nine months of 2017) amid its anticipated low-grade metal output and production.

In a disclosure to the Stock Market on Thursday, Philex attributed this decline to higher non-cash charges and an increase in excise tax rate.

To recall, the first package of the Tax Reform for Acceleration and Inclusion law increased the excise tax rates from 2% to 4% on both non-metallic and metallic minerals.

While its Padcal mine milled 4% more year-on-year to 6.53 million tonnes despite having temporarily suspend its production after typhoon Ompong caused a power outage, the company said that these ores were of lower grade compared to the previous year’s haul.

Its gold output was down by 21.95% to 48,929 ounces from 62,689 ounces in a comparative period last year, posting only P3.33 billion in revenues or 17.57% lower from a year ago.

Its copper output likewise slid from 21.9 million pounds to 20.5 million pounds. Its revenues generated from copper posted a 3.98% increment from P3.09 billion to P3.21 billion.

Eulalio B. Austin, Jr., Philex Mining President and CEO, in the same disclosure said that they are “cognizant that [their] existing ore body is challenged to deliver the desired grades due to its mature state.”

“To improve ore grades, a new mining level is being commissioned using sub-level caving mining method,” he added.

Philex mining in an earlier briefing said it has been looking for new sites and is considering underground mining, having already foreseen that it is running low in ores to mine.

“While waiting for the results of our exploration efforts, we will continue to implement operational efficiencies and cost enhancements to support our profitability,” Mr. Austin said.

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.