Pasig–(PHStocks)–Philex Mining Corporation (PSE: PX) has announced its historic high financial and operating results for 2011, with Core Net Income reaching a record PhP5.568 billion, a 34% growth from the previous year. The robust performance was attributed to a blend of higher metal production and unprecedented market prices for gold, copper and silver.
Philex Mining also posted its highest Reported Net Income to date in its 54 years of operating history. Last year, the country’s biggest gold and copper producer posted Reported Net Income of PhP5.800 billion, a growth of 47% from PhP3.945 in 2010 and besting its previous record earnings of PhP5.006 billion in 2007.
Core earnings per share grew 34% from 84.45 centavos in 2010 to PhP1.13 in 2011. Reported earnings per share also posted double digit increase of 35% from 2010 to PhP1.17 in 2011. Both EPS and Core EPS are the highest posted by the Company to date.
The Philippine mining leader also achieved a new record for Operating Revenue by achieving a 20% increase from PhP13.394 billion in 2010 to PhP16.134 billion in 2011, as gold continued its 11-year bull run in the world market. Realized price for gold averaged $1,536 per ounce, a 26% increase from $1,217 per ounce in 2010. Copper price per pound also improved from $3.63 in 2010 to $3.70 in 2011.
Income from operations was higher at 31% to PhP7.943 billion from PhP6.065 billion in 2010. Earnings before interest, tax, depreciation and amortization (EBITDA) likewise increased 35% to PhP8.851 billion in 2011 from P6.566 billion in the previous year.
Ore milled for the year reached 9.487 million tonnes, slightly higher than the 2010 tonnage of 9.364 million tonnes. For the year in review, the Company produced 7% higher volume of copper to 37.955 million pounds and a 5% increase in gold to 140,113 ounces.
“We owe our tremendous year-on-year improvement to the improving demand for metals in the world market and to the skills, dedication, and focus of our people,” said Manuel V. Pangilinan, Chairman and Chief Executive Officer of Philex Mining. “To all our management and staff, we extend our gratitude.”
The higher ore tonnage milled from the Padcal mine brought total costs and expenses higher by 9% to PhP6.977 billion this year from PhP6.426 billion a year ago. Expressed in per ounce of gold produced and after deducting revenues from copper and silver as byproduct credits, the operating cost of gold stood at $114 per ounce in 2011 from $92 per ounce a year ago. Expressed in per pound of copper produced and after deducting revenues from gold and silver as by-product credits, the operating cost of copper was at a negative $1.55 per pound in 2011 from negative $0.59 per pound a year ago.
Philex Petroleum Corp. (PSE: PXP), a 64.79%-controlled subsidiary, contributed PhP538 million to Philex Mining’s consolidated earnings this year, a turn-around from the loss of PhP191 million in 2010. Revenue from petroleum was almost five times the revenue of PhP112 million reported in 2010.
An extraordinary gain of PhP524 million was reflected this year from the restatement of Philex Mining’s investment in Pitkin Petroleum Plc to fair value. The accounting treatment of this investment was changed to that of an available-for-sale financial asset from that of investment in an associate when Philex Mining’s holdings in Pitkin was diluted from 21% to 18.46%.
“Gold prices have soared 22% over the past year and global demand and supply for metals are expected to be fundamentally strong throughout 2012,” said Pangilinan. “Philex Mining will continue to lead and will focus on exploring additional revenue streams to maximize the opportunities presented by the world’s growing requirements for gold and copper.”
“Although declining grades of ore are expected from the Padcal Mine, the extension of the mine life to 2020 ramps up reserves to 806,000 ounces of gold and 333 million pounds of copper for the next nine (9) years. This synchronizes well with our expanding portfolio of assets with the expected commencement of the Silangan Project in 2016,” Pangilinan added. “With the support of the Philippine Government, Philex Mining stays committed to optimizing the resources that our country offers for the shared benefit of our employees, shareholders, and more importantly, the communities where we operate, and at the same time, protecting and enhancing our environment.”