News Column

Benguet Corp. Income Dives

Nov. 20, 2011

James Konstantin Galvez, The Manila Times, Philippines

The country's oldest miner said that its net income dropped significantly in the third quarter of this year from heavy rainfall and frequent typhoons, which affected operations at its Sta. Cruz nickel mine. In a disclosure to the Philippine Stock Exchange, Benguet Corp. said that its consolidated net earnings reached P570,000 in July to September 2012, down significantly from P595.9 million a year ago.

For the first nine months of 2012, the company's earnings amounted to P185.4 million compared to P1.18 billion for the same period last year, which include substantial gains from a debt settlement and a Kingking project transaction.

Meanwhile, Benguet said that its consolidated operating revenues reached P240.81 million in the third quarter of 2012, from P283.52 million; while operating revenues reached P934.79 million in January to September 2012, from P675.52 million a year ago.

Mining operations contributed about P836.41 million of the Benguet's total revenue, of which some P449.56 million came from Benguetcorp Nickel Mines Inc.'s (BNMI) Sta. Cruz nickel project and P386.85 million from the Acupan gold project.

Benguet also reported that operating costs and expenses for the third quarter of 2012 increased to P351 million from P240 million for the same quarter last year, mainly from the higher cost of mine products sold and services.

"For the same reasons, the operating costs and expenses for nine months period this year also increased to P893 million from P553 million for the same period in 2011," the company said.

Benguet ended the third quarter of 2012 with consolidated assets of P6.55 billion, higher than end-December 2011 level of P5.30 billion.

Earlier, Benguet signed a $20-million pre-export financing facility agreement with Amsterdam Trade Bank N.V. and Maybank Philippines lnc. to be used for working capital and capital expenditure requirements, with bulk of the amount possibly going to its Sta. Cruz nickel project in Zambales province.

Benguet used to work with DMCI Mining Corp., a subsidiary of the Consunji family's holding firm DMCI Holdings Inc., but has started working solo on its nickel project since the first quarter of 2012.

Renato Claravall, chief financial officer of Benguet, earlier said that the real "test" is whether the company can post profit in the fourth quarter, which is traditionally a strong income period for the company, aside from the first quarter. Sta. Cruz nickel project in Zambales becomes productive from October to April, but the rainy season from June to September disrupts production as wet ore and rocky seas make production and shipping difficult.

The company has set its full-year nickel production to about 600,000 metric tons.

Distributed by MCT Information Services

Source: (c) 2012 The Manila Times (Manila, Philippines)

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