Buenaventura Announces Second Quarter and Six-Month Period 2013 Results
Buenaventura Announces Second Quarter and Six-Month Period 2013 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 second quarter 2013 (2Q13) and six-month (6M13) periods, ended June 30, 2013. All figures have been prepared in accordance with IFRS (International Financial Reporting Standards), are on a non GAAP basis and are stated in U.S. dollars (US$).
Comments from the Chief Executive Officer:
Mr. Roque Benavides, Buenaventura's Chief Executive Officer, stated:
"During the second quarter, metal prices declines significantly impacted our results, in addition to:
1. | Lower production in Uchucchacua due to a 10-day strike. | ||||
2. | Lower revenues and quotation period adjustments in El Brocal and Cerro Verde. | ||||
3. | Impairment and write-down adjustments at Yanacocha. |
As a consequence, results were lower than expected. Net income in the second quarter was US$19.0 million, 88% lower than the figure reported in 2Q12 (US$153.2 million). EBITDA from Buenaventura's Direct Operations was US$40.3 million, 65% lower than the figure reported in 2Q12 (US$114.6 million), while EBITDA, including Associates, decreased 47%, from US$351.8 million in 2Q12 to US$187.5 million in 2Q13.
The Company is focusing its activities on value creation by:
1. | Stopping production in non-profitable operations (Antapite, Poracota and Shila-Paula) and evaluating the performance of the other units. | ||||
2. | Focusing mine exploration activities on high grade and accessible targets. | ||||
3. | Increasing mining operation efficiency / Orcopampa and Uchucchacua. | ||||
4. | Focusing on brownfield explorations to reduce risk. | ||||
5. | Capital expenditures' control. | ||||
Financial Highlights (in millions of US$, except EPS figures): | ||||||||||||||||||||||||
2Q13 | 2Q12 | Var% | 6M13 | 6M12 | Var% | |||||||||||||||||||
Total Revenues | 285.8 | 350.5 | -18% | 640.5 | 727.5 | -12% | ||||||||||||||||||
Operating Income | -4.3 | 81.2 | -105% | 55.1 | 213.1 | -74% | ||||||||||||||||||
EBITDA Direct Operations | 40.3 | 114.6 | -65% | 134.1 | 286.2 | -53% | ||||||||||||||||||
EBITDA Including Associates | 187.5 | 351.8 | -47% | 455.9 | 770.6 | -41% | ||||||||||||||||||
Net Income | 19.0 | 153.2 | -88% | 121.6 | 361.3 | -66% | ||||||||||||||||||
EPS* | 0.07 | 0.60 | -88% | 0.48 | 1.42 | -66% | ||||||||||||||||||
(*) as of June 30, 2013, Buenaventura had 254,186,867 shares outstanding. | ||||||||||||||||||||||||
Operating Revenues
During 2Q13, net sales were US$273.1 million, an 18% decrease compared to the US$331.8 million reported in 2Q12. This was explained by lower metal prices.
Royalty income decreased 32%, to US$12.7 million in 2Q13 compared to the US$18.7 million reported in 2Q12. This was due to lower revenues at Yanacocha.
Operating Highlights | 2Q13 | 2Q12 | Var% | 6M13 | 6M12 | Var% | ||||||||||||||||||
Net Sales (in millions of US$) | 273.1 | 331.8 | -18% | 614.0 | 690.7 | -11% | ||||||||||||||||||
Average Realized Gold Price Gold (US$/oz)* | 1,388 | 1,619 | -14% | 1,477 | 1,673 | -12% | ||||||||||||||||||
Average Realized Gold Price (US$/oz) inc. Associates | 1,401 | 1,614 | -13% | 1,499 | 1,660 | -10% | ||||||||||||||||||
Average Realized Silver Price (US$/oz)* | 23.88 | 29.42 | -19% | 25.82 | 30.53 | -15% | ||||||||||||||||||
Average Realized Lead Price (US$/MT)* | 2,066 | 1,927 | 7% | 2,137 | 1,956 | 9% | ||||||||||||||||||
Average Realized Zinc Price (US$/MT)* | 1,841 | 1,922 | -4% | 1,897 | 1,963 | -3% | ||||||||||||||||||
Average Realized Copper Price (US$/MT)* | 7,067 | 7,827 | -10% | 7,506 | 8,254 | -9% | ||||||||||||||||||
(*) Buenaventura's Direct Operations | ||||||||||||||||||||||||
Sales Content | |||||||||||||||||||||||
2Q13 | 2Q12 | Var% | 6M13 | 6M12 | Var% | ||||||||||||||||||
Gold Oz Direct Operations | 116,751 | 107,661 | 8% | 241,377 | 234,241 | 3% | |||||||||||||||||
Gold Oz inc Associated | 258,490 | 287,985 | -10% | 520,595 | 579,363 | -10% | |||||||||||||||||
Silver Oz | 4,541,688 | 4,558,020 | 0% | 7,782,423 | 7,354,671 | 6% | |||||||||||||||||
Lead MT | 7,934 | 9,358 | -15% | 14,617 | 11,476 | 27% | |||||||||||||||||
Zinc MT | 10,775 | 14,449 | -25% | 20,979 | 22,381 | -6% | |||||||||||||||||
Copper MT | 4,503 | 824 | 446% | 9,611 | 6,535 | 47% | |||||||||||||||||
(*) Buenaventura's Direct Operations | |||||||||||||||||||||||
Net sales for the first six months of 2013 were US$614.0 million, 11% lower than in the first six months of 2012, while royalty income was US$26.5 million in 6M13, a 28% decrease compared to the US$36.8 million reported in 6M12.
Production and Operating Costs
Buenaventura's equity production1 in 2Q13 was 98,210 ounces of gold, 8% lower than the 107,168 ounces reported in 2Q12, mainly due to a production decline at Orcopampa and Poracota. This was offset by a production increase at La Zanja and Breapampa. Silver production, including associated companies, during 2Q13 was 4,420,340 million ounces, a 2% decrease when compared to the figure reported in 2Q12 (4,509,259 million oz.).
Equity production1 in 6M13 was 203,673 ounces of gold and 9.1 million ounces of silver. This represented a 9% decrease in gold production (107,168 oz. in 2012), and a 7% increase in silver production compared to 6M12 (8.5 million oz.).
Equity Production1 | ||||||||||||||||||||||||
2Q13 | 2Q12 | Var% | 6M13 | 6M12 | Var% | |||||||||||||||||||
Gold (oz) Direct Operations | 98,210 | 107,168 | -8% | 203,673 | 225,002 | -9% | ||||||||||||||||||
Gold (oz) inc. Associated | 239,604 | 277,394 | -14% | 483,433 | 555,191 | -13% | ||||||||||||||||||
Silver (oz) inc. Associated | 4,420,340 | 4,509,259 | -2% | 9,145,136 | 8,523,034 | 7% | ||||||||||||||||||
Lead ( MT) | 6,552 | 6,910 | -5% | 13,603 | 11,625 | 17% | ||||||||||||||||||
Zinc ( MT) | 10,620 | 11,842 | -10% | 20,234 | 19,245 | 5% | ||||||||||||||||||
Copper (MT) inc. Associated | 14,911 | 13,629 | 9% | 28,269 | 29,044 | -3% | ||||||||||||||||||
Orcopampa's(100% owned by Buenaventura) total gold production in 2Q13 was 54,988 ounces, 9% lower than the 60,745 ounces reported in 2Q12. Production from the Chipmo mine during 2Q13 was 50,196 ounces, 12% lower compared to the 56,762 ounces reported in 2Q12, due to lower ore grade (see Appendix 2). The old tailings treatment produced 4,791 ounces of gold (compared to 3,984 oz. in 2Q12). Total gold production in 6M13 was 8,903 ounces, an 18% decrease when compared to 6M12 (10,891 oz.).
Cash operating cost in 2Q13 was US$792/oz., 46% higher when compared to 2Q12 (US$542/oz.). This was mainly explained by the lower gold production and higher contractor costs that resulted from an increase in drilling works and drifting to reach Pucay area.
At Uchucchacua(100% owned by Buenaventura), total silver production in 2Q13 was 2.7 million ounces, in-line with 2Q12 production. The lower ore treated, due to a 10-day strike in April, was offset by an increase in the recovery rate, from 72% (2Q12) to 83% (2Q13)(see Appendix 2). Zinc production in 2Q13 was 1,938 MT, 5% lower than the figure reported in 2Q12 (2,036 MT), while lead production increased 4% (1,966 MT in 2Q13 vs. 1,891 MT in 2Q12). During 2013, silver production was 5.7 million ounces; zinc production was 3,936 MT, while lead production was 4,171 MT vs. 5.5 million ounces, 4,247 MT and 3,981 MT, respectively, in 6M12.
Despite the 10-day strike impact, cash operating cost in 2Q13 was US$16.20/oz., 3% lower than the figure reported in 2Q12 (US$16.65/oz.) due to:
1. |
