Buenaventura Announces Fourth Quarter and Full Year 2012 Results
Buenaventura Announces Fourth Quarter and Full Year 2012 Results
LIMA, Peru--(BUSINESS WIRE)-- Compañia de Minas Buenaventura S.A.A. ("Buenaventura" or "the Company") (NYSE: BVN; Lima Stock Exchange: BUE.LM), Peru's largest, publicly-traded precious metals mining company, announced today results for the fourth quarter 2012. All figures have been prepared in accordance with IFRS and are stated in U.S. dollars (US$).
Comments from the Chief Executive Officer:
Mr. Roque Benavides, Buenaventura's Chief Executive Officer, stated:
"Net income in the fourth quarter was US$139.1 million, 39% lower than the figure reported in 4Q11 (US$227.9 million). EBITDA from Buenaventura's Direct Operations was US$130.2 million, 32% lower than the figure reported in 4Q11 (US$192.1 million), while EBITDA including Affiliates decreased 33%, from US$421.7 million in 4Q11 to US$281.5 million in 4Q12.
These results were mainly explained by lower volume of gold sold, higher operating costs, exploration efforts and decreased contributions from affiliates.
Financial Highlights (in millions of US$, except EPS figures): | ||||||||||||||||||||||||
4Q12 | 4Q11 | Var | FY 2012 | FY 2011 | Var | |||||||||||||||||||
Total Revenues | 424.2 | 402.3 | 5% | 1,563.5 | 1,556.6 | 0% | ||||||||||||||||||
Operating Income | 86.7 | 164.0 | -47% | 418.2 | 704.4 | -41% | ||||||||||||||||||
EBITDA Direct Operations | 130.2 | 192.1 | -32% | 569.9 | 835.4 | -32% | ||||||||||||||||||
EBITDA Including Affiliates | 281.5 | 421.7 | -33% | 1,438.8 | 1,681.3 | -14% | ||||||||||||||||||
Net Income | 139.1 | 227.9 | -39% | 684.7 | 858.9 | -20% | ||||||||||||||||||
EPS | 0.55 | 0.90 | -39% | 2.69 | 3.38 | -20% | ||||||||||||||||||
(*) As of December 31, 2012, Buenaventura had 254,232,571 shares outstanding.
Within this release, Buenaventura presents financial measures in accordance with IFRS, as well as on a non-GAAP basis.
Operating Revenues
During 4Q12, net sales were US$411.6 million, a 7% increase compared to the US$385.0 million reported in 4Q11. This was explained by higher sales content of all metals, except gold.
Royalty income decreased 28% to US$12.6 million in 4Q12 from the US$17.4 million reported in 4Q11 due to lower revenues at Yanacocha.
Operating Highlights | 4Q12 | 4Q11 | Var % | FY 2012 | FY 2011 | Var % | ||||||||||||||||||
Net Sales (million of US$) | 411.6 | 385.0 | 7% | 1,496.3 | 1,493.9 | 0% | ||||||||||||||||||
Average Gold Price (US$/oz.) Direct Operations | 1,713 | 1,690 | 1% | 1,679 | 1,574 | 7% | ||||||||||||||||||
Average Gold Price (US$/oz.) inc Yanacocha & Coimolache | 1,714 | 1,684 | 2% | 1,669 | 1,577 | 6% | ||||||||||||||||||
Average Silver Price (US$/oz.) | 32.64 | 32.40 | 1% | 31.25 | 35.40 | -12% | ||||||||||||||||||
Average Lead Price (US$/MT) | 2,203 | 1,991 | 11% | 2,065 | 2,262 | -9% | ||||||||||||||||||
Average Zinc Price (US$/MT) | 1,947 | 1,905 | 2% | 1,919 | 2,200 | -13% | ||||||||||||||||||
Average Copper Price (US$/MT) | 7,899 | 7,524 | 5% | 7,937 | 8,568 | -7% | ||||||||||||||||||
(*) Buenaventura's Direct Operations | ||||||||||||||||||||||||
Sales Content | ||||||||||||||||||||||||
4Q12 | 4Q11 | Var % | FY 2012 | FY 2011 | Var % | |||||||||||||||||||
Gold Oz Direct Operations | 92,454 | 122,833 | -25% | 439,816 | 505,894 | -13% | ||||||||||||||||||
Gold Oz inc Yanacocha & Tantahuatay | 212,469 | 270,728 | -22% | 1,078,826 | 1,145,603 | -6% | ||||||||||||||||||
Silver Oz | 5,507,511 | 4,366,347 | 26% | 17,474,113 | 14,843,193 | 18% | ||||||||||||||||||
Lead MT | 5,518 | 3,857 | 43% | 25,589 | 18,192 | 41% | ||||||||||||||||||
Zinc MT | 5,267 | 4,041 | 30% | 43,180 | 33,307 | 30% | ||||||||||||||||||
Copper MT | 12,028 | 7,516 | 60% | 22,373 | 23,231 | -4% | ||||||||||||||||||
(*) Buenaventura's Direct Operations | ||||||||||||||||||||||||
Accumulated net sales in 2012 were US$1,496.3 million, in-line with the figure reported in 2011, while royalty income was US$67.2 million, a 7% increase compared to the US$62.7 million reported in 2011.
Production and Operating Costs
Buenaventura's equity production1 in 4Q12 was 108,489 ounces of gold, 13% lower than the 124,504 ounces reported in 4Q11 mainly due to a decrease in Orcopampa production. Silver production, including affiliates, in 4Q12 was 4.6 million ounces, a 12% increase when compared to the figure reported in 4Q11 (4.1 million oz.).
Equity production1 in 2012 was 446,443 ounces of gold and 18.3 million ounces of silver. This represented a 6% decrease in gold production (475,770 oz. in 2011), and a 12% increase in silver production compared to 2011 (16.2 million oz.).
Equity Production1 | ||||||||||||||||||||||||
4Q12 | 4Q11 | Var% | FY 2012 | FY 2011 | Var% | |||||||||||||||||||
Gold (oz) Direct Operations | 108,489 | 124,504 | -13% | 446,443 | 475,770 | -6% | ||||||||||||||||||
Gold (oz) inc. Affiliates | 211,448 | 270,659 | -22% | 1,033,969 | 1,040,218 | -1% | ||||||||||||||||||
Silver (oz) inc. Affiliates | 4,593,711 | 4,107,467 | 12% | 18,262,156 | 16,243,279 | 12% | ||||||||||||||||||
Lead ( MT) | 5,844 | 3,475 | 68% | 25,345 | 17,444 | 45% | ||||||||||||||||||
Zinc ( MT) | 6,787 | 3,151 | 115% | 39,139 | 22,621 | 73% | ||||||||||||||||||
Copper (MT) inc. Affiliates | 20,670 | 16,980 | 22% | 66,221 | 69,873 | -5% | ||||||||||||||||||
Orcopampa's(100% owned by Buenaventura) total gold production in 4Q12 was 59,779 ounces, 16% lower than the 71,296 ounces reported in 4Q11. Production from the Chipmo mine during 4Q12 was 55,652 ounces, 15% lower compared to the 65,788 ounces reported in 4Q11 due to a 9-day strike in October (See Appendix 2). The old tailings treatment produced 4,128 ounces of gold (compared to 5,508 oz. in 4Q11). Accumulated total gold production in 2012 was 260,378 ounces, a 9% decrease when compared to 2011 (285,201 oz.).
Cash operating cost in 4Q12 was US$714/oz., 51% higher when compared to 4Q11 (US$472/oz.). This was mainly explained by lower gold production and higher contractor expenses due to greater exploration efforts. Cash cost during 2012 was US$559/oz.
At Uchucchacua(100% owned by Buenaventura), total silver production in 4Q12 was 3.01 million ounces, 8% higher when compared to 2.79 million ounces in 4Q11 due to a 5% increase in the recovery rate (See Appendix 2). Zinc production in 4Q12 was 2,931 MT, 43% higher than the figure reported in 4Q11 (2,047 MT), while lead production increased 25% (2,556 MT in 4Q12 vs. 2,051 MT in 4Q11). During 2012, silver production was 11.3 million ounces; zinc production was 9,820 MT, while lead production was 8,742 MT vs. 10.1 million ounces, 6,668 MT and 7,546 MT, respectively, in 2011.
Cash operating cost in 4Q12 was US$16.57/oz., in-line with the figure reported in 4Q11 (US$16.35/oz.). Cash cost during 2012 was US$16.97/oz. (US$16.27/oz. in 2011).
At Julcani (100% owned by Buenaventura), total production in 4Q12 was 615,712 ounces of silver, 1% higher compared to 4Q11 (611,711 ounces). During 2012, silver production was 2.4 million ounces, similar to the figure reported in 2011.
Silver cash operating cost in 4Q12 was US$14.38/oz., 15% higher than 4Q11 (US$12.52/oz.), mainly due to an increase in energy supply expenses. Cash cost during 2012 was US$13.5/oz.
Breapampa (100% owned by Buenaventura) commenced operations in November. Total production in 4Q12 was 8,817 ounces of gold.
La Zanja (53.06% owned by Buenaventura) total production in 4Q12 was 28,670 ounces of gold, a 13% decrease when compared to 4Q11 (32,857 oz.). Accumulated gold production in 2012 was 112,387 ounces, 16% lower than 2011 (134,190 oz.), but in-line with La Zanja's mining plan.
Cash operating cost in 4Q12 was US$753/oz., 63% higher than 4Q11 (US$463/oz.) due to an increase in supply costs (mainly explained by an increase of reagent consumption and prices). Cash cost during 2012 was US$622/oz.
Tantahuatay (40.04% owned by Buenaventura) total production in 4Q12 was 35,340 ounces of gold (14,150 oz. attributable to Buenaventura). During 2012, gold production was 141,268 ounces (56,564 oz. attributable to Buenaventura). Cash operating cost in 4Q12 was US$393/oz and US$402/oz for 2012.
At El Brocal(53.76% owned by Buenaventura), total plant capacity was devoted to treat copper ores during 4Q12.
Copper production was 13,166 MT, 68% higher than the 7,852 MT reported in 4Q11. For 2012, copper production increased 2% (24,218 MT in 4Q12 versus 23,796 MT in 4Q11). Copper cash cost was US$5,198/MT, 26% higher than 4Q11 (US$4,135/MT).
Silver production decreased 56% from 420,329 ounces in 4Q11 to 185,231 ounces in 4Q12.
During 2012, total zinc production was 34,949 MT, a 48% increase when compared to the 23,675 MT reported in 2011. In the case of silver, total production increased 5%, from 2.9 million ounces in 2011 to 3.1 million ounces in 2012. Lead production was 12,329 MT in 2012, 30% higher than 2011 (9,504 MT).
General and Administrative Expenses
General and administrative expenses in 4Q12 were US$21.6 million, 32% higher than the figure reported in 4Q11 (US$16.3 million). This figure included US$6.0 million in metallurgical research studies. For 2012, general and administrative expenses were US$99.3 million versus US$75.2 million in 2012 (an increase of 32%).
Operating Income
Operating income in 4Q12 was US$86.7 million, a 47% decrease compared to the US$164.0 million reported in 4Q11. This decrease was mainly due to a 53% increase in operating costs and exploration expenses, while revenues increased 5%. It is important to mention that during 4Q12, El Brocal purchased US$18.0 million in copper concentrates to blend with Marcapunta copper concentrates, which negatively impacted operational costs and margins.
For 2012, operating income was US$418.2 million versus US$704.4 million in 2012 (a decrease of 41%).
Share in Associated Companies
During 4Q12, Buenaventura's share in associated companies was US$89.9 million, 28% lower than the US$124.5 million reported in 4Q11. Yanacocha's contribution to these results decreased 63%, from US$86.8 million in 4Q11 to US$32.4 million in 4Q12, while Cerro Verde's contribution decreased 28% from US$40.0 million in 4Q11 to US$28.6 million in 4Q12. Coimolache (Tantahuatay mine) results partially offset this decrease with a 44% higher contribution (US$8.8 million in 4Q12 vs. US$6.1 million in 4Q11).
For 2012, Buenaventura's share in associated companies was US$464.2 million, in-line with the figure reported in 2012.
YANACOCHA
At Yanacocha (43.65% owned by Buenaventura), 4Q12 gold production was 235,875 ounces of gold, 30% lower than 4Q11 production (334,833 oz.). Accumulated gold production in 2012 was 1,345,992 ounces, 4% higher than 2012 (1,293,123 oz.).
Costs applicable to sales (CAS) at Yanacocha in 4Q12 were US$635/oz., 19% higher than the figure reported in 4Q11 (US$533/oz.) due to lower production. Net income at Yanacocha in 4Q12 was US$75.7 million, 62% lower compared to 4Q11 (US$199.2 million). Accumulated net income in 2012 was US$626.5 million, 2% lower than 2011 (US$642.4 million).
During 4Q12, EBITDA totaled US$186.0 million, a 49% decrease compared to 4Q11 (US$362.0 million). This decrease was mainly due to a 29% decrease in sales. Accumulated EBITDA in 2012 was US$1,241.8 million, 6% higher than 2012 (US$1,167.4 million).
Capital expenditures at Yanacocha were US$172.5 million in 4Q12 and US$995.0 in
