20th Feb 2015 11:38
LONDON (Alliance News) - First Quantum Minerals Ltd Friday reported higher net earnings for both the fourth quarter and 2014 as a whole, despite a dip in full-year revenue, as the company continued to cut out costs in the business to help ease the pressure caused by lower metal prices.
The Canada-based mining and metals company operating in Spain, Turkey, Finland and Zambia reported net earnings of USD453.2 million for the final three months of 2014, up from USD131.3 million the year before, although sales revenue was down year-on-year in the quarter at USD821.2 million, from USD897.0 million, hit by lower copper, gold and nickel production and sales in the quarter.
For 2014 as a whole, the company said net earnings came in at USD834.8 million, up from USD458.6 million in 2013, despite revenue dipping slightly to USD3.54 billion, from USD3.55 billion.
Earnings before interest, taxes, depreciation and amortisation in the fourth quarter was USD301.0 million, lower than USD364.2 million the prior year. However, for the full year, EBITDA rose to USD1.41 billion from USD1.35 billion in 2013.
Copper production for the year rose 3.7% to 427,655 tonnes, while nickel production fell by 2.% to 45,879 tonnes, and gold production was down 7.4% to 229,813 ounces. Copper prices fell by 6.3% to USD3.22 per pound, although nickel prices per payable pound increased 12% to USD7.58, it said.
"Overall our operations performed well in 2014 recording the highest annual copper production in the company's history. This was achieved despite persisting limited local smelter capacity in Zambia which affected Kansanshi's performance and sales; and a structural failure in an atmospheric leach tank at Ravensthorpe which suspended operations there in mid-December," said Chief Executive and Chairman Philip Pascall in a statement.
The company declared a final dividend of CAD0.0487 per share for 2014, taking the total dividend to CAD0.0991 for 2014.
It also said it made good progress in 2014 towards its target of achieving annual copper production capacity of 1.3 million tonnes.
The company said it is targeting copper production between 410,000 and 440,000 tonnes in 2015, nickel production between 32,000 and 40,000 tonnes, and gold production between 218,000 and 247,000 ounces.
Its current guidance for cash cost of production for 2015 is for copper between USD1.30 and USD1.55 per pound, and nickel between USD4.80 and USD5.30 per pound.
"Concerns about the global economy and demand for natural resources have put pressure on many aspects of the company and on others in the natural resource sector. Our previously-announced reduction in planned capital expenditures for 2015 is a substantial step in addressing some of those pressures," said Pascall.
Cash flows from operations, before working capital changes and tax paid, amounted to USD263.1 million for the fourth quarter of 2014 and USD1.36 billion for the full year.
"While we believe the strong long-term fundamentals for copper remain intact, we consider it prudent to take additional action to ensure that the company can withstand a prolonged period of lower metal prices while building production capacity for the future. As such, we continue to pursue our company-wide cost reduction and cash conservation efforts and are very pleased with the support we are receiving from the lead bankers," Pascall said.
First Quantum shares were untraded in London Friday morning. The stock was last quoted at 736.5 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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