LISTED miner Atlas Consolidated Mining and Development Corp. swung to a net loss in the first nine months of the year as lower copper production and lower average realized copper prices cut gross revenues by a third, while the recognition of unrealized foreign exchange losses also weighed on profitability.
In a statement, Atlas said its consolidated net loss stood at P1.3 billion for January-September 2015 against a net income of P841 million in the same period last year.
It said gross revenues decreased by 33 percent to P8.4 billion as of the third quarter of 2015 from P12.59 billion as of 30 September 2014.
“The decline was attributable to lower average realized copper prices and lower copper production,” the miner said.
The company said production volumes and cost efficiency improvements in the third quarter helped to offset the low copper price environment.
However, an accounting charge for unrealized foreign exchange losses resulted in a reported third quarter consolidated net loss of P707 million.
“Excluding the provision for unrealized foreign exchange losses, consolidated net loss for the nine months was P569 million and for the third quarter was P111 million,” it added.
Third quarter results showed improved operational performance at Atlas Mining’s wholly-owned subsidiary Carmen Copper Corporation with increased production levels of 26.9 million pounds of copper metal concentrate, up from 24.0 million lbs in the second quarter.
Copper grade improved to 0.305 percent from 0.299 percent and copper recovery improved to 86.2 percent from 84.6 percent compared to the second quarter.
Also, milling tonnage expanded by 8 percent to 4.6 million metric tons with average daily throughput benefitting from improvements in maintenance and process efficiencies to deliver 50,537 tons per day (tpd), up from 47,227 tpd in the previous quarter.
Copper prices remained low during the third quarter, bringing the year-to-date September average realized copper price to $2.57/lb, 19 percent lower than $3.16/lb in year-to-date September 2014.
Also, the average realized gold price dropped 9 percent to $1,171/oz from $1,290/oz the previous year.
“Ongoing cost containment initiatives helped bring total operating cash costs down by 17 percent to P6.7 billion in the first nine months and average cash cost per pound of copper dropped to $1.71/lb from $1.86/lb in 2014,” Atlas said.
Atlas Mining incurred P1.1 billion in foreign exchange provisions year to date, although it has incurred no actual cash loss on foreign exchange. The company remains naturally hedged as its US dollar-denominated loans are matched with its 100 percent US-dollar denominated revenues.