Philex posts net profit of P3.2B

Philex Mining Corp. said it posted record earnings for the first half of 2011 on the back of higher metal prices and higher production.

Consolidated net income reached P3.22 billion from January to June, up 233 percent from P965 million in the same period last year. Core net income reached P2.84 billion, higher by 188 percent than the P983.9 million a year ago.

Philex said its core net income translated to P0.58 a share in the first half of 2011 compared with P.02 a year ago. Reported net income amounted to P0.65 a share versus P0.20 in the same period of 2010.

Consolidated revenue was also the highest level ever for the period at P8.15 billion, up 68 percent from the revenue of P4.86 billion a year ago.

Gold sales contributed 54 percent to total revenue at P4.4 billion, up 79 percent from P2.46 billion in 2010. Copper sales, which accounted for 41-percent revenue, increased 49 percent to P3.32 billion in 2011 from P2.23 billion last year. Combined silver and petroleum sales improved 149 percent to P430.6 million from P172.6 million.

“We are gratified by the very favorable metal prices and the good production performance of our Padcal mine. These factors helped generate record levels of earnings and cash flows thus far this year,” Philex president Jose Ernesto C. Villaluna Jr. said.

Higher production raised total costs and expenses by 11 percent to P3.45 billion in the first half from P3.11 billion last year.

However, Philex said the higher volume milled this period effectively lowered unit production cost.

An extraordinary gain of P523.7 million was recorded this year from the restatement of the company’s investment in Pitkin Petroleum Plc to fair value after the accounting treatment was changed to that of an “available-for-sale financial asset from investment in an associate” when the company’s holdings in Pitkin were diluted from 21 percent to 18.46 percent.

Revenue from petroleum, principally from Forum Energy Plc, a 64.45-percent-controlled subsidiary through wholly owned Philex Petroleum Corp., amounted to P328.9 million. This was higher by 183 percent from P116.1 million a year ago. Petroleum contributed net earnings of P98.8 million to the company’s consolidated profit this year compared with a loss of P54.6 million in 2010.

Philex chairman and CEO Manuel V. Pangilinan said that aside from its record first-half performance, the company had significant milestones during the period: the acquisition of a 5-percent equity in Lepanto Consolidated Mining Co., which would enable Philex to invest in the Far Southeast Gold Project of Lepanto; a joint-venture agreement with Manila Mining Corp. on the Kalayaan copper-gold project, which could boost the 393 million tons of resource of the Silangan project.