Philex Q1 net down 34% but core profit more than doubles

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Without one-time gains from insurance claims, Philex Mining Corp.’s net income dropped to P267.4 million in the first quarter of this year, 34 percent lower than the P403.3 million recorded in the same period in 2013.

However, its core net income for the first three months more than doubled to P278.4 million from P132.4 million a year ago.

The mining firm’s net income in the first quarter of last year was boosted by a one-time gain of P1.017 billion in insurance claims in connection with the tailings spill at its Padcal copper-gold mine in Benguet Province.

Consolidated revenues more than tripled to P2.913 billion in the first quarter of this year from P889.3 million in 2013.


Philex Mining said the growth in revenue was due to the higher number of operating days and the corresponding increase in metal production, partially offset by lower realized metal prices.

“Padcal mine operated for three whole months in 2014 compared with approximately one month of operation in 2013, resulting in significantly higher output and increased revenues,” the company said.

During the period, Padcal milled 2.396 million tons, equivalent to a daily average of 26,623 tons throughput. In the first quarter of 2013, milling reached 611,801 tons, or 25,492 tons average daily tonnage.

Gold production in the first quarter of 2014 rose to 26, 442 ounces, or almost twofold from the same period last year. Gold revenue surged 227 percent to P1.610 billion, despite realized prices for gold falling to $1,371 per ounce.

Similarly, copper produced in the first quarter almost quadrupled from last year to 9.47 million pounds, corresponding to a 246-percent increase in revenue to P1.178 billion, as realized prices for copper dropped to $2.85 per pound, from $ 3.42 per pound.

Combined revenues from silver, coal, and petroleum more than doubled to P124.4 million, with the petroleum volume increase mainly due to higher production at the Galoc oil field.

“We are glad to be starting the year on a positive note, and looking forward to operate finally the Padcal mine for the full 12 months in 2014, after two successive years of partial operations,” said Philex President and Chief Executive Officer Eulalio Austin Jr.

Austin noted that rehabilitation initiatives at the Padcal mine affirm their strong commitment to ensure maximum safety of all the stakeholders and facilities, and full compliance with all the applicable laws governing its operations.

“Furthermore, we believe the company has completed all the remedial measures and investments required to improve the water management system at Padcal and last year, these new facilities were commissioned,” he said, noting that construction of the third and final chute is also currently underway and will be completed by July 1, 2014.

With respect to the local tax issue, the executive said that the parties involved are already in an advanced stage of discussions and that Philex is optimistic that a mutually beneficial resolution will be reached at the soonest possible time.

“In addition, we have also successfully completed the cleanup of the bodies of water affected by the incident in 2012, and continue to be engaged in constant dialogue with the Pollution Adjudication Board,” Austin added.

Philex’s Silangan project in Surigao del Norte, on the other hand, also continued to progress in the first quarter of 2014 as Philex awaits completion of the project’s pre-feasibility study within the second quarter of the year.

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