Significantly higher prices for its bread-and-butter metals saw HudBay Minerals (HBM-T, HBMFF-O) more than octuple its earnings during the first three months of 2006.
Canada’s third-largest zinc and copper producer took in earnings of $76.0 million (or 70 per diluted share) on revenue of $208 million, compared with year-ago earnings of $9.2 million (12 a share) on $151.5 million.
The impressive increase also reflects higher production and lower cash costs. The volumes of metals produced were as follows: 29,906 tonnes zinc (versus 29,206 tonnes in the first quarter of 2005); 23,686 tonnes of copper anode (20,697 tonnes); 26,511 oz. gold (25,774 oz.); and 390,230 oz. silver (338,294 oz.).
Likewise, gross realized metal prices were higher across the board. The company’s realized price for zinc jumped by 74% to US$1.08 per lb., while that for copper increased around 56% to US$2.33/lb. The realized prices for byproduct gold and silver increased by 25% and 28.5% to US$532 per oz. and US$9.29 per oz.
On the flip side, operating costs climbed by just 3% to $121.9 million, owing mostly to a limited reliance on carbon-based fuels. Cash costs, net of byproduct credits, were more than quartered to US5 per lb. of zinc.
During the quarter, the company sold 30,172 tonnes of zinc, (27,097 tonnes), 11,200 tonnes of zinc oxide (10,300 tonnes), 18,932 tonnes of copper (20,382 tonnes), 14,846 oz. of gold (25,397 oz.) and 232,456 oz. of silver (331,644 oz.). Sales of copper and contained gold and silver were less than production due mainly to a planned copper inventory buildup related to a scheduled copper smelter shutdown.
As if the latest quarter’s performance wasn’t good enough, the company said it plans to refile its fourth quarter and 2005 financial results to include a lower share count and higher earnings.
The company said its earnings per diluted share for the last three months of 2005 should have been 47 over around 93.8 million shares, instead of the previously reported 34 over 129.6 million shares. For the full year earnings will be refiled at $1.01 per share, up from 70; the share count will be trimmed by 30% to 84.8 million.
The financial statements will be otherwise unchanged.
AT quarter’s end, Hudbay had $127.4 million in cash and equivalents, versus net debt of $79.9 million.
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