PHILEX PROFIT REACHES P2.4B AS METAL PRICES SURGE
PHILEX Mining Corp. earned P2.43 billion last year, or nearly double the earlier year’s P1.23 billion net income attributable to parent firm equity holders, largely due to higher metal prices.
“No doubt, 2021 was a blessing for us considering the high metal prices for copper and gold that even with the marginal grades of ore that we are mining, we continue working on our business continuity plans,” Philex President and Chief Executive Officer Eulalio B. Austin, Jr. said in a press release on Monday.
He added that the company was able to “successfully deal” with the deadly coronavirus of “strict and constant adherence” to health protocols and its mass vaccination program.
“Consequently, we have had no disruption in our operation for the year,” Mr. Austin said.
The listed gold and copper producer reported that its full-year core net income rose 118.1% to P2.53 billion from P1.16 billion in 2020. Of last year’s income, P668 million was booked in the fourth quarter.
“Favorable and sustained higher levels of realized prices for gold and copper resulted in higher operating revenues in 2021, registering a healthy 25% increase over the year 2020,” Philex said in the press release.
Operating revenues rose 25.2% to P9.8 billion in 2021 from P7.83 billion in 2020, while operating costs rose by 4.8% to P6.6 billion from P6.3 billion in 2020.
The higher costs came after an increase in the cost of materials and supplies, logistics expenses, higher royalties, and higher excise taxes, though this was partly offset by lower power costs and noncash charges, as a result of the extension of the mine’s life.
In the fourth quarter of 2021, realized gold prices were at its highest, reaching $1,783 per ounce and copper at $4.44 per pound in October 2021, the listed mining firm said.
As for production, tonnage milled in the fourth quarter slowed down to 1.97 million tons from 2.006 million tons in the third quarter. In 2021, tonnage milled hit 7.946 million tons or 1.4% up from 2020.
“Ore grades continue to hold at the same level as in 2020, leading to minimal impact on gold and copper output in 2021 compared with 2020,” Philex said.
Philex said that due to healthy earnings before interest, taxes, depreciation, and amortization (EBITDA) at P4.3 billion, it was able to continue its debt reduction program.
“The board declared a cash dividend of P0.05 centavos per common share, aggregating to P247 million, to shareholders on record as of March 21, which will be paid on April 3, as Philex preserves cash surplus as part of the initial capital for the development of Silangan,” the company said.
For 2022, Philex said the sustained prices of gold and copper in the global market will allow it to optimize mineable reserves and metal output.
“The year 2021 also brought hope to the mining industry with significant regulatory changes on the horizon, such as the suspension of the ban on new mining agreements and lifting of the ban on open pit mining method,” Mr. Austin said.
“Profitability and liquidity since 2020 have been on a positive trend and has materially enhanced the company’s profitability and financial condition, allowing the company to expedite the launching of the development of the Silangan project under its in-phase mine plan,” Philex added.
The Silangan copper-gold project in Surigao del Norte is expected to start commercial operations by 2025.
The project needs an initial capital of $224 million or about P11.2 billion, to be funded by a combination of proceeds from a stock rights offering, the cash reserves of Philex, and possibly some incremental debt at the Silangan level.
Philex has appointed BDO Capital and Investment Corp. as its issue manager and lead underwriter for the fund raising.
Philex also said that studies are underway to explore and determine the feasibility of the mineable resources and reserves surrounding the Padcal mine in Benguet.
“We will continue our relentless drive to improve our operations, and are now looking at new investment opportunities, whilst prolonging the life of our Padcal mine. The job security and welfare of our employees and their dependents are still our primordial concern,” said Philex Chairman Manuel V. Pangilinan.
“Silangan will be an exciting project for us in 2022. It could ensure that our business continues for a long time to come. We look forward to this year with a fair degree of optimism, given the buoyant prices of commodities in general, and of metal prices in particular, driven by global geopolitical and supply factors,” he added.
Philex shares went up 4.73% or 30 centavos to finish at P6.64 each at the stock exchange on Monday.
Philex is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Metro Pacific Investments Corp. and PLDT, Inc.
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