30th Jul 2015 09:54
LONDON (Alliance News) - First Quantum Minerals Ltd Thursday said its earnings and production both substantially fell in the second quarter and first half of 2015 but reiterated its full year production guidance.
The miner reported net earnings before exceptional items of USD18 million in the second quarter of 2015, a huge drop from USD152 million a year earlier as revenue plummeted to USD610 million from USD945 million.
That brought net earnings before items to USD6 million for the first half, with revenue dropping to USD1.26 billion from USD1.83 billion.
Earnings before interest, tax, depreciation, amortisation and exceptional items was USD161 million in the second quarter, also considerably down from USD402 million a year earlier, bringing the first half result to USD281 million compared to USD775 million.
The fall in revenue was caused by copper, nickel and gold production all falling in the first half, compounded by all those commodities experiencing price falls in the period. All of its commodities saw production fall in the second quarter and in the first half compared to a year earlier.
First half copper production fell to 200,551 tonnes compared to 220,926 tonnes but the company's cash costs for copper also fell to USD1.31 per pound from USD1.41 per pound.
That led to a fall in copper sales to 179,567 tonnes in the first half compared to 217,235 tonnes a year earlier, also compounded by a fall in prices to USD2.61 per pound from USD3.03.
For the whole of 2015, First Quantum is expecting to produce between 410,000 to 440,000 tonnes of copper, and its cash cost will remain between USD1.25 to USD1.40 per pound.
Nickel production in the first half totalled 15,327 tonnes from 24,061 tonnes as cash costs rose to USD4.57 per pound from USD4.30, with nickel sales dropping to 14,427 tonnes from 24,748 tonnes as nickel prices fell to USD6.21 per pound from USD7.38.
Nickel production for the full year is expected to be in the region of 32,000 to 40,000 tonnes and its cash cost may experience a small rise as the company;s guidance sits at USD4.75 to USD5.00 per pound.
Gold production for the first half came in at 109,507 ounces compared to 120,887 ounces a year earlier with gold sales totalling 100,684 ounces from 113,261 ounces.
Guidance for gold production for the full year is between 218,000 to 247,000 ounces.
First Quantum did not state its cash costs or achieved gold price for the half, but gold prices have been weakening lately. At the start of 2015, gold prices were around USD1,186 per ounce before reaching a high of USD1,308 in January, dropping to a five-year low of USD1,073 earlier in July and then rose to trade at around USD1,086 per ounce on Thursday.
Guidance for its other commodities have also been released, with platinum production to be between 25,000 to 35,000 ounces in 2015 and palladium production is set to be 20,000 to 23,000 ounces.
"Operationally we remain on course to achieve the production guidance outlined at the beginning of the year," said the company.
"We continue to exercise prudence in cash outlays and look for optimization opportunities to ensure First Quantum is well-positioned to benefit fully in stronger markets," it added.
First Quantum shares were down 1.2% to 542.40 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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