Higher metal prices failed to lift the profit of Pangilinan-led Philex Mining Corp. in 2022 as gold and copper production declined while coal and other input costs increased.
Philex Mining, among the largest gold and copper producers in Southeast Asia, said in a disclosure on Monday that its net income attributable to equity holders of parent firm had declined by 26.1 percent to P1.79 billion last year from P2.43 billion the year prior.
Revenues dropped by 5.4 percent to P9.26 billion while core net income also fell by 31.58 percent to P1.73 billion.
“Favorable metal prices and foreign exchange rate kept operating revenues and core net income within safe levels,” the listed firm said.
Operating revenues during the October to December period were lower at P2.2 billion against P2.57 billion in the same quarter last year.
“Revenues during the first half of the year cushioned the impact of the lower revenues in [the fourth quarter of 2022] to the total revenues for the year 2022,” it added.
Philex Mining said realized gold and copper prices had recovered after registering a decline in the third quarter of last year.
In terms of production, tonnage milled tumbled by 5.6 percent to 7.432 million tons from 7.946 million tons.
Gold output stood at 48,567 ounces, down 12 percent while copper production reached 25.086 million pounds, also slightly lower.
Operating costs and expenses totaled P7.11 billion for the year, up 8 percent. The bulk of the expenses went to production costs which amounted to P4.86 billion.
Philex Mining said this was largely due to increases in operating costs starting the third quarter of 2022. It was forced to spend more because of the higher cost of materials and supplies and logistics expenses influenced by inflationary pressures and the depreciation of the Philippine peso against the US dollar in the past year.
“The increasing trend in coal prices in the global market directly impacted and increased the operating costs of the company’s power provider that resulted [in] higher power costs charged to the company beginning the fourth quarter of 2022,” it said.
Further, cash flow as measured by earnings before interest, taxes, depreciation and amortization went down to P3.524 billion from P4.317 billion.
Despite a lukewarm financial performance, Philex Mining said it would continue to pursue Padcal mine life extension and look for other business opportunities near this site, which has been operating since 1958.
The company also plans to explore the “green metals space,” particularly nickel, given its importance to global energy transition.
“We went into 2022 knowing fully well what we were up against. We did not expect the global uncertainty to wane, but we were cautiously optimistic that 2022 would be another good year for Philex. There had been operational challenges, coupled with the high levels of global inflation, the volatility of currencies and of metal prices, but with careful planning and adaptation to the changes in business conditions, we were able to achieve our targets,” said Philex Mining president and CEO Eulalio Austin Jr.