Atlas Mining posts P1.97 billion net loss

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ATLAS Consolidated Mining and Development Corp. reported that its consolidated net loss ballooned by 124% in 2017, to P1.97 billion, despite its production rebounding in the second half of the year.

In a disclosure to the stock market on Friday, Atlas Mining said that despite its earnings having improved, its “mark to market losses for copper price hedges and for effective interest rates on certain loans affected the bottom line.”

“Without these mark to market provisions, the underlying net loss would have been P745 million compared to P879 million for the same period last year,” it read.

The company’s core income dropped by 38% to P746 million from last year’s P1.195 billion while its revenues slipped by 1% to P11.96 million from P12.08 million in 2016.

However, its earnings before interest, tax, depreciation and amortization (EBITDA) last year went up by 20% to P3.81 billion from P3.17 billion in 2016 due to improved copper prices.

Atlas Mining’s wholly owned subsidiary Carmen Copper Corp. processed 14.24 million tons of ore, producing 78.19 million pounds of copper metal and 21,979 ounces of gold.

This is less than the 16.72 million tons milled in 2016, which produced 102.88 million pounds of copper metal and 33,958 ounces of gold.

“The lower tonnage of ore delivered to the processing plant in 2017 was caused mainly by the unusually high levels of rainfall experienced in the first quarter of 2017 which restricted mine operations,” Atlas Mining said in a press release.

In the second half of 2017, Atlas Mining managed to produce 14% more copper (41.58 million pounds) compared to that produced in the first six months of the year (36.62 million pounds).

The 2017 average realized copper price at $2.78 per pound was 26% more than 2016’s $2.21 per pound, while gold prices increased to $1,259 per ounce from the 2016 price of $1,241 per ounce.

“The provision for mark to market loss represents the accounting valuation of outstanding copper price hedges as copper price increased above the hedge price at the end of the current year,” the company explained.

“This provision changes as the copper price changes and the final variance is determined at the month of settlement.”

Aside from this, the company also said that it had taken into account the difference in the nominal interest rate and the effective interest rate of certain long-term debts.

Atlas Mining also reported that its cash costs were 9% lower at P8.15 billion from P8.97 billion in 2016 despite the 25% increase in average cost per pound to $1.39 per pound due to higher waste charged to operations, lower by-products credits, and lower volume shipped.

To recall, the company saw its consolidated net loss double in the first nine months last year to P939 million from P470 million in 2016, and also pointed to copper price increasing above the hedge price.

This despite registering a steady improvement in production with a 12% increase in copper metal.

Atlas Mining’s shares on Friday closed P0.0100 or 0.20% lower to P5 from Thursday’s P5.01 shares a piece.