Buenaventura Announces Second Quarter and Six-Month 2014 Results
Compañia de Minas Buenaventura S.A.A. (“Buenaventura” or “the Company”) (NYSE:BVN; Lima Stock Exchange: BUE.LM), Peru’s largest publicly-traded precious metals mining company, announced today results for the second quarter (2Q14) and 6-month (6M14) periods ended June 30, 2014. All figures have been prepared in accordance with IFRS (International Financial Reporting Standards) on a non GAAP basis and stated in U.S. dollars (US$).
Second Quarter 2014 Highlights:
- EBITDA from direct operations increased 89% compared to 2Q13 and 41% compared to 1Q14.
- Net Income increased 22% compared to 2Q13 and improved significantly compared to the US$16.1 loss in the previous quarter.
- Stronger results were driven by higher silver and copper volume sold, from Uchucchacua and El Brocal’s production, respectively.
- Yanacocha’s contribution to results was a loss of US$12.9 million, mainly due to a US$21.3 million leachpad write-down. Gold production is expected to ramp up in 2H14 to reach guidance of 895k - 985k ounces.
- Equity gold production from direct operations to recover in 2H14 to achieve annual guidance (420k – 430k ounces). Accessing new areas closer to surface in Orcopampa will allow a 2014 production of 200k ounces. La Zanja and Tantahuatay are expected to produce 140k ounces each in 2014. Breapampa will produce 80k ounces of gold in 2014.
- Uchucchacua is expected to increase ore treated volume in 3Q14 due to new permittings. Ore extraction will be focused in the Socorro mine with high silver-manganese content.
- The Public Audience at Tambomayo project was successfully held on July 24-25. The Environmental Impact Assessment (EIA) has been filed and approval is expected by the end of 2014.
- Huanza Hydro plant commenced full commercial operations And should generate an excess of 95 MW to supply energy to all direct operations at competitive costs.
- El Brocal plant expansion to 18K tons per day was completed and full operations should start in September. The plant will operate in August at 14k tons per day capacity.
Financial Highlights (in millions of US$, except EPS figures):
| 2Q14 | 2Q13 | Var% | 6M14 | 6M13 | Var% | ||||||||||||||
| Total Revenues | 305.1 | 285.8 | 7% | 587.1 | 640.5 | -8% | |||||||||||||
| Operating Income | 24.5 | -4.3 | - | 28.0 | 55.1 | -49% | |||||||||||||
| EBITDA Direct Operations | 75.2 | 39.7 | 89% | 128.5 | 133.1 | -3% | |||||||||||||
| EBITDA Including Affiliates | 136.5 | 186.9 | -27% | 240.2 | 454.4 | -47% | |||||||||||||
| Net Income | 23.1 | 19.0 | 22% | 7.0 | 121.6 | -94% | |||||||||||||
| EPS | 0.09 | 0.07 | 22% | 0.03 | 0.48 | -94% |
(*) as of June 30, 2014, Buenaventura had 254,186,867 outstanding shares.
Operating Revenues
During 2Q14, net sales were US$297.7 million, a 9% increase compared to the US$273.1 million reported in 2Q13. This was explained by higher copper and silver sales.
Royalty income decreased 42%, to US$7.4 million in 2Q14 compared to the US$12.7 million reported in 2Q13. This was due to lower revenues at Yanacocha (42% lower QoQ).
| Operating Highlights | 2Q14 | 2Q13 | Var% | 6M14 | 6M13 | Var% | |||||||||||||
| Net Sales (in millions of US$) | 297.7 | 273.1 | 9% | 571.7 | 614.0 | -7% | |||||||||||||
| Average Realized Gold Price (US$/oz)* | 1,274 | 1,388 | -8% | 1,292 | 1,477 | -13% | |||||||||||||
| Average Realized Gold Price (US$/oz) inc. Affiliates | 1,279 | 1,399 | -9% | 1,291 | 1,497 | -14% | |||||||||||||
| Average Realized Silver Price (US$/oz)* | 19.76 | 23.88 | -17% | 19.75 | 25.82 | -24% | |||||||||||||
| Average Realized Lead Price (US$/MT)* | 2,073 | 2,066 | 0% | 2,123 | 2,137 | -1% | |||||||||||||
| Average Realized Zinc Price (US$/MT)* | 2,101 | 1,841 | 14% | 2,148 | 1,897 | 13% | |||||||||||||
| Average Realized Copper Price (US$/MT)* | 6,575 | 7,067 | -7% | 6,746 | 7,506 | -10% | |||||||||||||
| (*) Buenaventura’s Direct Operations | |||||||||||||||||||
| Volume Sold | 2Q14 | 2Q13 | Var% | 6M14 | 6M13 | Var% | |||||||||||||
| Gold Oz Direct Operations | 110,292 | 116,751 | -6% | 218,227 | 241,377 | -10% | |||||||||||||
| Gold Oz inc Associated Companies | 206,389 | 260,938 | -21% | 416,270 | 520,329 | -20% | |||||||||||||
| Silver Oz | 4,949,060 | 4,541,688 | 9% | 9,145,615 | 7,782,423 | 18% | |||||||||||||
| Lead MT | 4,199 | 7,934 | -47% | 8,502 | 14,617 | -42% | |||||||||||||
| Zinc MT | 2,943 | 10,775 | -73% | 6,114 | 20,979 | -71% | |||||||||||||
| Copper MT | 10,186 | 4,503 | 126% | 19,187 | 9,611 | 100% | |||||||||||||
For the six-month period of 2014, net sales decreased 7% from US$614.0 million in 2Q13 to US$571.7 million in 2Q14. Royalties decreased 42% (US$15.4 million in 6M14 vs US$26.5 million in 6M13).
Production and Operating Costs
In 2Q14, Buenaventura’s gold equity production from direct operations decreased 4%, mainly due to lower production in Orcopampa, but was positively offset by higher production from Breapampa. Gold including associated companies, decreased 20% due to lower production in Yanacocha.
| Equity Production | 2Q14 | 2Q13 | Var% | 6M14 | 6M13 | Var% | ||||||||
| Gold Oz Direct Operations1 | 94,557 | 98,210 | -4% | 182,350 | 203,673 | -10% | ||||||||
| Gold Oz inc Associated Companies | 191,897 | 239,604 | -20% | 383,353 | 483,433 | -21% | ||||||||
| Silver Oz Direct Operations1 | 4,581,786 | 4,216,449 | 9% | 8,542,534 | 8,751,751 | -2% | ||||||||
| Silver Oz inc Associated Companies | 4,805,398 | 4,420,340 | 9% | 8,952,618 | 9,171,583 | -2% | ||||||||
| Lead MT | 4,413 | 6,552 | -33% | 9,066 | 13,603 | -33% | ||||||||
| Zinc MT | 4,333 | 10,620 | -59% | 8,842 | 20,234 | -56% | ||||||||
| Copper MT Direct Operations1 | 6,190 | 2,808 | 120% | 11,769 | 5,427 | 117% | ||||||||
| Copper MT inc Associated Companies | 17,289 | 14,911 | 16% | 34,803 | 28,341 | 23% |
| 1 Direct Operation production includes 100% of Buenaventura’s operating units, 53.06% of La Zanja and 54.07% of El Brocal. |
Orcopampa’s (100% owned by Buenaventura) total gold production in 2Q14 was 51,102 ounces, 2% higher than the 50,196 ounces reported in 2Q13. The higher tonnage treated positively offset the lower ore grade (see Appendix 2). Cost Applicable to Sales (CAS) in 2Q14 was US$851/oz of gold, 3% lower compared to 2Q13 (US$881/oz.). The lower cost was mainly explained by lower reagent (cyanide and peroxide) consumption and price.
At Uchucchacua (100% owned by Buenaventura), total silver production in 2Q14 was 3.0 million ounces, 10% higher than the 2.7 million ounces reported in 2Q13, mainly due to higher tonnage and ore grade despite the lower grade. Zinc production in 2Q14 was 1,575 MT, 19% lower than the figure reported in 2Q13 (1,938 MT), while lead production decreased 13% (1,717 MT in 2Q14 vs. 1,966 MT in 2Q13). Cost Applicable to Sales (CAS) in 2Q14 was US$17.86/oz of silver, a decrease of 4% compared to 2Q13 (US$18.63/oz.) due to the higher production, and was partially offset by an increase in preparation labors focused in the Socorro area with high silver content.
At Mallay (100% owned by Buenaventura), total production in 2Q14 was 302,118 ounces of silver, 4% lower than in 2Q13 (315,379 oz) due to lower ore treated. Cost Applicable to Sales (CAS) in 2Q14 was US$14.34/oz of silver, a decrease of 34% compared to US$21.74/oz in 2Q13 due to a more focalized exploration program.
At Julcani (100% owned by Buenaventura), total production in 2Q14 was 763,529 ounces of silver, 39% higher compared to 2Q13 (548,890 ounces), due to higher ore treated (20-day strike in 2Q13) and higher silver grade. Cost Applicable to Sales (CAS) in 2Q14 was US$14.29/oz of silver, 17% lower than 2Q13 (US$17.16/oz.), mainly explained by a reduction in commercial deductions and higher production.
Breapampa’s (100% owned by Buenaventura) total production in 2Q14 was 21,228 ounces of gold, 10% higher when compared to the figure reported in 2Q13 (19,342 ounces). CAS in 1Q4 was US$427/oz of gold, 29% lower than the US$604/oz reported in 2Q13.
La Zanja’s (53.06% owned by Buenaventura) total production in 2Q14 was 36,685 ounces of gold, a 1% decrease compared to 2Q13 (37,045 oz). CAS in 2Q14 was US$518/oz of gold, 20% lower than 2Q13 (US$646/oz.), due to a reduction in exploration activities from Pampa Verde. It is important to mention that our exploration efforts are now focused on the Alejandra underground project.
Tantahuatay’s (40.10% owned by Buenaventura) total production in 2Q14 was 35,171 ounces of gold (14,102 oz attributable to Buenaventura) 1% lower than the figure reported in 2Q13 (35,382 oz, 14,188 attributable to Buenaventura). CAS in 2Q14 was US$475/oz of gold, 31% lower than in 2Q13 (US$685/oz.) due to lower supplies and contractor expenses as a result of significantly lower stripping ratio.
At El Brocal (54.07% owned by Buenaventura), copper production was 11,332 MT vs. 5,050 MT reported in 2Q13 (124% increase). Silver production was 0.5 million ounces 26% higher than the 0.4 million ounces reported in 2Q14. There was no zinc production in 2Q14. Copper CAS was US$4,781/MT in 2Q14, a decrease of 31% when compared to US$6,931/MT in 2Q13.
General and Administrative Expenses
General and administrative expenses in 2Q14 were US$23.1 million, 4% higher when compared with the figure reported in 2Q13 (US$22.3 million) due to a credit in the long compensation provision in 2Q13.
Exploration in Non-Operating Areas
Exploration in non-operating areas during 2Q14 was US$14.8 million compared with a US$4.1 million credit reported in 2Q13. During the period, Buenaventura’s main exploration efforts were focused on the following projects: La Zanja Underground (US$3.5 million) Tambomayo (US$3.1 million) and San Gregorio (US$2.0 million).
Share in Associated Companies
During 2Q14, Buenaventura’s share in associated companies was US$20.2 million, 59% lower when compared to the US$48.8 million reported in 2Q13, composed by:
| Share in the Result of Associates (in millions of US$) | 2Q14 | 2Q13 | Var% | 6M14 | 6M13 | Var% | ||||||||
| Cerro Verde | 26.5 | 20.8 | 27% | 42.2 | 48.0 | -12% | ||||||||
| Coimolache (Tantahuatay mine) | 6.1 | 2.1 | 194% | 10.9 | 10.2 | 7% | ||||||||
| Yanacocha | (12.9) | 23.8 | -154% | (37.4) | 74.8 | -150% | ||||||||
| Canteras del Hallazgo (Chucapaca project) | 0.1 | 2.1 | -96% | 0.0 | 0.0 | - | ||||||||
| Other smaller investments | 0.4 | 0.0 | - | 0.0 | 0.0 | - | ||||||||
| Total | 20.2 | 48.8 | -59% | 15.7 | 133.0 | -88% | ||||||||
YANACOCHA
At Yanacocha (43.65% owned by Buenaventura), during 2Q14 gold production was 190,695 ounces of gold, 35% lower than 2Q13 production (291,428 oz). For the six-month period 2014, gold production was 398,206 ounces, 31% lower than 576,903 ounces in 2013. This production was in-line with the mining plan and guidance for 2014 remains between 895k – 985k ounces.
Net income was a negative US$46.5 million compared to US$54.5 million in 2Q13, driven by a US$21.3 million write-down of leach inventory value from the La Quinua pad. EBITDA totaled US$6.1 million in 2Q14, a 97% decrease compared to 2Q13 (US$225.7 million). For 6M14, net income was negative US$100.0 million (compared to a positive US$171.3 million in 2Q13) and EBITDA was US$12.0 million (compared to US$486.6 million in 2Q13).
Capital expenditures at Yanacocha were US$28.1 million in 2Q14 (US$119.6 million in 2Q13).
CERRO VERDE
At Cerro Verde (19.58% owned by Buenaventura), during 2Q14 copper production was 56,683 MT (11,098 MT attributable to Buenaventura), an 8% decrease compared to 2Q13 (61,813 MT and 12,103 MT attributable to Buenaventura). For the first six-month period of 2014, copper production was 117,638 MT (23,034 MT attributable to Buenaventura), in-line with the figure reported in 2Q13.
During 2Q14, Cerro Verde reported net income of US$138.3 million, 30% higher compared to US$106.3 million in 2Q13. This was mainly due to 13% higher sales. EBITDA totaled US$234.9 million in 2Q14, a 18% increase compared to 2Q13 (US$200.0 million). For the 6M14, net income was US$236.4 million (compared to US$245.1 million in 2Q13) and EBITDA was US$423.0 million (compared to US$427.7 million in 2Q13).
Capital expenditures at Cerro Verde in 2Q14 totaled US$397.6 million and US$240.3 million in 2Q13.
COIMOLACHE (Tantahuatay operation)
At Coimolache (40.10% owned by Buenaventura), attributable contribution in 2Q14 was US$6.1 million (US$2.1 million in 2Q13). For 6M14, the contribution was US$10.9 million, compared to US$10.2 million reported in 6M13.
Net Income
Buenaventura’s 2Q14 net income was US$23.1 million (US$0.09 per share) 22% higher when compared to US$19.0 million (US$0.07 per share) reported in 2Q13. For 6M14, net income was US$7.0 million, 94% lower than 121.6 million reported in 6M13.
Project Development and Exploration
Huanza Hydroelectric Plant (100% ownership)
Huanza Hydro plant commenced full commercial operations. The plant will generate an excess of 95 MW to supply energy to all direct operations at competitive costs.
El Brocal Expansion (54.07% ownership)
Full operations are expected to start in September to treat 11k tpd of polymetallic ore from Colquijirca and 7k tpd of copper ore from Marcapunta.
Tambomayo Project (100% ownership)
Two Public Audiences at Tambomayo project were successfully held on July 24-25. The Environmental Impact Assessment (EIA) has been filed and we expect to receive the approval by the end of 2014. Mine development and engineering studies are in progress.
Company Description
Compañía de Minas Buenaventura S.A.A. is Peru’s largest, publicly traded, precious metals company and a major holder of mining rights in Peru. The Company is engaged in the mining, processing, development and exploration of gold and silver and other metals via wholly owned mines as well as through its participation in joint exploration projects.
Buenaventura currently operates several mines in Peru (Orcopampa*, Uchucchacua*, Breapampa*, Mallay*, Julcani*, Recuperada*, El Brocal, La Zanja and Coimolache.
The Company owns 43.65% of Minera Yanacocha S.R.L (a partnership with Newmont Mining Corp.), an important precious metal producer; 19.58% of Sociedad Minera Cerro Verde, an important Peruvian copper producer, and 49% of Canteras del Hallazgo S.A, owner the Chucapaca project.
For a printed version of the Company’s 2013 Form 20-F, please contact the investor relations contacts on page 1 of this report, or download the PDF format file from the Company’s web site at www.buenaventura.com.
(*) Operations wholly owned by Buenaventura
Note on Forward-Looking Statements
This press release may contain forward-looking information (as defined in the U.S. Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties, including those concerning the Company’s, Yanacocha’s and Cerro Verde’s costs and expenses, results of exploration, the continued improving efficiency of operations, prevailing market prices of gold, silver, copper and other metals mined, the success of joint ventures, estimates of future explorations, development and production, subsidiaries’ plans for capital expenditures, estimates of reserves and Peruvian political, economic, social and legal developments. These forward-looking statements reflect the Company’s view with respect to the Company’s, Yanacocha’s and Cerro Verde’s future financial performance. Actual results could differ materially from those projected in the forward-looking statements as a result of a variety of factors discussed elsewhere in this Press Release.
**Tables to follow**
APPENDIX 1
| Equity Participation in Subsidiaries and Affiliates (as of June 30, 2014) | |||||||
| BVN | Operating | ||||||
| Equity % | Mines / Business | ||||||
| Consorcio Energético de Huancavelica S.A* | 100.00 | Energy – Huanza Hydroelectrical plant | |||||
| Buenaventura Ingenieros S.A* | 100.00 | Engineering Consultant | |||||
| Processadora Industrial Rio Seco S.A* | 100.00 | Rio Seco chemical plant | |||||
| El Molle Verde S.A.C* | 100.00 | Trapiche project | |||||
| Minera La Zanja S.A* | 53.06 | La Zanja | |||||
| Sociedad Minera El Brocal S.A.A* | 54.07 | Colquijirca and Marcapunta | |||||
| Canteras del Hallazgo S.A ** | 49.00 | Chucapaca project | |||||
| Compañía Minera Coimolache S.A ** | 40.10 | Tantahuatay | |||||
| Minera Yanacocha S.R.L ** | 43.65 | Yanacocha | |||||
| Sociedad Minera Cerro Verde S.A.A ** | 19.58 | Cerro Verde | |||||
| (*)Consolidates | |||||||
APPENDIX 2
| GOLD PRODUCTION | |||||||||||||||||||||||||
| Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||
| Orcopampa | Orcopampa Old Tailings | Orcopampa | Orcopampa Old Tailings | ||||||||||||||||||||||
| 2014 | 2013 | % | 2014 | 2013 | % | 2014 | 2013 | % | 2014 | 2013 | % | ||||||||||||||
| Ore Milled DMT | 115,857 | 107,790 | 7% | 0 | 129,891 | - | 219,084 | 227,720 | -4% | 0 | 253,744 | - | |||||||||||||
| Ore Grade OZ/MT | 0.45 | 0.48 | -5% | 0.000 | 0.05 | - | 0.448 | 0.49 | -9% | 0.000 | 0.05 | - | |||||||||||||
| Recovery Rate % | 97.3% | 97.3% | 0% | 0.0% | 77.6% | - | 96.8% | 96.6% | 0% | 0.0% | 75.1% | - | |||||||||||||
| Ounces Produced | 51,102 | 50,196 | 2% | 0 | 4,791 | - | 95,032 | 108,565 | -12% | 999 | 8,903 | - | |||||||||||||
| Orcopampa Total Production | 2Q14 | 51,102 | 2Q13 | 54,987 | 6M14 | 96,031 | 6M13 | 117,468 | |||||||||||||||||
| La Zanja | Tantahuatay | ||||||||||||||||||||||||
| 2Q14 | 2Q13 | % | 6M14 | 6M13 | % | 2Q14 | 2Q13 | % | 6M14 | 6M13 | % | ||||||||||||||
| Ounces Produced | 36,685 | 37,045 | -1% | 72,622 | 68,251 | 6% | 35,171 | 35,382 | -1% | 67,804 | 69,689 | -3% | |||||||||||||
| Breapampa | |||||||||||||||||||||||||
| 2Q14 | 2Q13 | % | 6M14 | 6M13 | % | ||||||||||||||||||||
| Ounces Produced | 21,228 | 19,342 | 10% | 42,156 | 39,826 | 6% | |||||||||||||||||||
| SILVER PRODUCTION | |||||||||||||||||||||||||
| Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||
| Uchucchacua | Colquijirca | Uchucchacua | Colquijirca | ||||||||||||||||||||||
| 2014 | 2013 | % | 2014 | 2013 | % | 2014 | 2013 | % | 2014 | 2013 | % | ||||||||||||||
| Ore Milled DMT | 244,992 | 233,999 | 5% | 0 | 578,787 | - | 457,700 | 495,971 | -8% | 0 | 949,187 | - | |||||||||||||
| Ore Grade OZ/MT | 15.28 | 14.09 | 8% | 0.00 | 0.91 | - | 14.94 | 13.98 | 7% | 0.00 | 1.16 | - | |||||||||||||
| Recovery Rate % | 80.0% | 82.6% | -3% | 0.0% | 60.1% | - | 78.4% | 81.6% | -4% | 0.0% | 65.7% | - | |||||||||||||
| Ounces Produced | 2,997,602 | 2,723,364 | 10% | 0 | 317,455 | - | 5,366,112 | 5,651,920 | -5% | 0 | 722,648 | - | |||||||||||||
| ZINC PRODUCTION | |||||||||||||||||||||||||
| Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||
| Uchucchacua | Colquijirca | Uchucchacua | Colquijirca | ||||||||||||||||||||||
| 2014 | 2013 | % | 2014 | 2013 | % | 2014 | 2013 | % | 2014 | 2013 | % | ||||||||||||||
| Ore Milled DMT | 244,992 | 233,999 | 5% | 0 | 578,787 | - | 457,700 | 495,971 | -8% | 0 | 949,187 | - | |||||||||||||
| Ore Grade % | 1.06% | 1.25% | -15% | 0.00% | 2.87% | - | 1.09% | 1.20% | -9% | 0.00% | 2.89% | - | |||||||||||||
| Recovery Rate % | 60.5% | 66.3% | -9% | 0.0% | 65.2% | - | 61.0% | 66.3% | -8% | 0.0% | 64.9% | - | |||||||||||||
| MT Produced | 1,575 | 1,938 | -19% | 0 | 10,832 | - | 3,045 | 3,936 | -23% | 0 | 17,782 | - | |||||||||||||
APPENDIX 3: EBITDA Reconciliation (in thousand US$)
| 2Q14 | 2Q13 | 6M14 | 6M13 | |||||||
| Net Income | 32,574 | 20,859 | 22,202 | 131,792 | ||||||
| Add / Substract: | 42,627 | 18,835 | 106,333 | 1,347 | ||||||
| Provision for income tax, net | 10,494 | 10,434 | 17,816 | 42,945 | ||||||
| Share in associated companies by the equity method, net | -20,169 | -48,806 | -15,689 | -132,974 | ||||||
| Interest income | -1,842 | -2,228 | -3,648 | -3,184 | ||||||
| Interest expense | 3,199 | 8,678 | 6,590 | 9,881 | ||||||
| Loss on currency exchange difference | 268 | 6,715 | 764 | 6,603 | ||||||
| Long Term Compensation provision | 0 | -9,322 | 1,925 | -18,527 | ||||||
| Depreciation and Amortization | 49,771 | 46,494 | 95,909 | 85,670 | ||||||
| Workers´ participation provision | 906 | 1,178 | 1,872 | 5,241 | ||||||
| Impairment of long-term lived assets | 0 | 0 | 794 | 0 | ||||||
| Write-Down Adjustment | 0 | 5,692 | 0 | 5,692 | ||||||
| EBITDA Buenaventura Direct Operations | 75,201 | 39,694 | 128,535 | 133,139 | ||||||
| EBITDA Yanacocha (43.65%) | 2,653 | 98,502 | 5,236 | 212,394 | ||||||
| EBITDA Cerro Verde (19.58%) | 46,001 | 39,079 | 82,826 | 83,735 | ||||||
| EBITDA Coimolache (40.10%) | 12,599 | 9,636 | 23,649 | 25,141 | ||||||
| EBITDA Buenaventura + All Associates | 136,455 | 186,910 | 240,245 | 454,408 |
| Note: | ||
| EBITDA (Buenaventura Direct Operations) consists of earnings before net interest, taxes, depreciation and amortization, share in associated companies, net, loss on currency exchange difference, other, net, provision for workers’ profit sharing and provision for long-term officers’ compensation. | ||
| EBITDA (including Associated companies) consists of EBITDA (Buenaventura Direct Operations), plus (1) Buenaventura’s equity share of EBITDA (Yanacocha) (2) Buenaventura’s equity share of EBITDA (Cerro Verde), plus (3) Buenaventura’s equity share of EBITDA (Coimolache). All EBITDA mentioned were similarly calculated using financial information provided to Buenaventura by the associated companies. | ||
| Buenaventura presents EBITDA (Buenaventura Direct Operations) and EBITDA (including affiliates) to provide further information with respect to its operating performance and the operating performance of its equity investees, the affiliates. EBITDA (Buenaventura Direct Operations) and EBITDA (including affiliates) are not a measure of financial performance under IFRS, and may not be comparable to similarly titled measures of other companies. You should not consider EBITDA (Buenaventura Direct Operations) and EBITDA (including affiliates) as alternatives to operating income or net income determined in accordance with IFRS, as an indicator of Buenaventura’s, affiliates operating performance, or as an alternative to cash flows from operating activities, determined in accordance with IFRS, as an indicator of cash flows or as a measure of liquidity. |
| APPENDIX 4 | |||||||
| Compañía de Minas Buenaventura S.A.A. and Subsidiaries | |||||||
| Consolidated Statement of Financial Position | |||||||
| As of June 30, 2014 and December 31, 2013 | |||||||
| 2,014 | 2,013 | ||||||
| Assets | US$(000) | US$(000) | |||||
| Current assets | |||||||
| Cash and cash equivalents | 138,052 | 61,898 | |||||
| Financial assets at fair value through profit or loss | - | - | |||||
| Trade and other accounts receivable, net | 272,746 | 260,434 | |||||
| Income tax credit | 55,658 | 37,370 | |||||
| Prepaid expenses | 15,652 | 14,597 | |||||
| Hedge derivative financial instruments | - | - | |||||
| Embedded derivatives for concentrate sales, net | 5,957 | 1,857 | |||||
| Inventory, net | 151,833 | 175,719 | |||||
| Total current assets | 639,898 | 551,875 | |||||
| Non-current assets | |||||||
| Trade and other accounts receivable, net | 18,156 | 20,607 | |||||
| Long-term inventory | 39,124 | 23,366 | |||||
| Investment in associates | 2,363,055 | 2,358,410 | |||||
| Mining concessions, development costs and property, plant and equipment, net | 1,535,626 | 1,515,460 | |||||
| Investment Properties | 11,160 | - | |||||
| Deferred income tax asset, net | 72,322 | 83,525 | |||||
| Other assets | 3,231 | 7,132 | |||||
| Total non-current assets | 4,042,674 | 4,008,500 | |||||
| Total assets | 4,682,572 | 4,560,375 | |||||
| Liabilities and shareholders’ equity | |||||||
| Current liabilities | |||||||
| Bank loans | 2,321 | - | |||||
| Trade and other accounts payable | 253,285 | 301,811 | |||||
| Provisions | 71,826 | 69,800 | |||||
| Income tax payable | 2,186 | 2,140 | |||||
| Hedge derivatives financial instruments | 10 | 1,093 | |||||
| Embedded derivatives for concentrate sales, net | - | - | |||||
| Financial obligations | 47,641 | 11,370 | |||||
| Total current liabilities | 377,269 | 386,214 | |||||
| Non-current liabilities | |||||||
| Trade and other accounts payable | 15,057 | 12,229 | |||||
| Provisions | 100,651 | 106,376 | |||||
| Financial obligations | 336,602 | 223,027 | |||||
| Deferred income tax liability, net | 4,605 | - | |||||
| Total non-current liabilities | 456,915 | 341,632 | |||||
| Total liabilities | 834,184 | 727,846 | |||||
| Shareholders’ equity | |||||||
| Issued capital, net of treasury shares for US$(000)62,665 | 750,497 | 750,497 | |||||
| Investment shares, net of treasury shares for US$(000)765 | 1,396 | 1,396 | |||||
| Additional paid-in capital | 219,055 | 219,055 | |||||
| Legal reserve | 162,688 | 162,663 | |||||
| Other reserves | 269 | 269 | |||||
| Retained earnings | 2,425,720 | 2,421,238 | |||||
| Other equity reserves | 104 | 104 | |||||
| 3,559,729 | 3,555,222 | ||||||
| Non-controlling interest | 288,659 | 277,307 | |||||
| Total shareholders’ equity | 3,848,388 | 3,832,529 | |||||
| Total liabilities and shareholders’ equity | 4,682,572 | 4,560,375 |
| Compañía de Minas Buenaventura S.A.A. and Subsidiaries | ||||||||||||||
| Consolidated Income Statement | ||||||||||||||
| For the six-month periods ended June 30, 2014 and 2013 | ||||||||||||||
| For the three-month period ended June 30, | For the six-month period ended June 30, | |||||||||||||
| 2,014 | 2,013 | 2,014 | 2,013 | |||||||||||
| US$(000) | US$(000) | US$(000) | US$(000) | |||||||||||
| Operating income | ||||||||||||||
| Net sales | 297,710 | 273,099 | 571,678 | 613,972 | ||||||||||
| Royalty income | 7,399 | 12,693 | 15,424 | 26,495 | ||||||||||
| Total operating income | 305,109 | 285,792 | 587,102 | 640,467 | ||||||||||
| Operating costs | ||||||||||||||
| Cost of sales, without considering depreciation and amortization | (149,634 | ) | (172,869 | ) | (292,593 | ) | (331,004 | ) | ||||||
| Exploration in operating units | (21,907 | ) | (49,681 | ) | (53,635 | ) | (96,050 | ) | ||||||
| Depreciation and amortization | (49,771 | ) | (46,494 | ) | (95,909 | ) | (85,670 | ) | ||||||
| Royalties | (7,102 | ) | (6,929 | ) | (14,480 | ) | (16,595 | ) | ||||||
| Total operating costs | (228,414 | ) | (275,973 | ) | (456,617 | ) | (529,319 | ) | ||||||
| Gross profit | 76,695 | 9,819 | 130,485 | 111,148 | ||||||||||
| Operating expenses | ||||||||||||||
| Administrative expenses | (23,061 | ) | (22,262 | ) | (51,817 | ) | (37,168 | ) | ||||||
| Exploration in non-operating areas | (14,821 | ) | 4,085 | (25,195 | ) | (17,675 | ) | |||||||
| Stoppage of mining units | (15,941 | ) | - | (15,941 | ) | - | ||||||||
| Selling expenses | (4,614 | ) | (3,970 | ) | (8,784 | ) | (8,480 | ) | ||||||
| Contingencies | (2,002 | ) | (1,340 | ) | (9,643 | ) | (2,393 | ) | ||||||
| Impairment of long-term lived assets | - | - | (794 | ) | - | |||||||||
| Other, net | 8,268 | 9,320 | 9,724 | 9,631 | ||||||||||
| Total operating expenses | (52,171 | ) | (14,167 | ) | (102,450 | ) | (56,085 | ) | ||||||
| Operating profit (loss) | 24,524 | (4,348 | ) | 28,035 | 55,063 | |||||||||
| Other income, net | ||||||||||||||
| Share in the results of associates under equity method | 20,169 | 48,806 | 15,689 | 132,974 | ||||||||||
| Financial income | 1,842 | 2,228 | 3,648 | 3,184 | ||||||||||
| Financial expenses | (3,199 | ) | (8,678 | ) | (6,590 | ) | (9,881 | ) | ||||||
| Net loss from currency exchange difference | (268 | ) | (6,715 | ) | (764 | ) | (6,603 | ) | ||||||
| Total other income, net | 18,544 | 35,641 | 11,983 | 119,674 | ||||||||||
| Profit before income taxes and non-controlling interest | 43,068 | 31,293 | 40,018 | 174,737 | ||||||||||
| Income taxes | (10,494 | ) | (10,434 | ) | (17,816 | ) | (42,945 | ) | ||||||
| Net profit | 32,574 | 20,859 | 22,202 | 131,792 | ||||||||||
| Attributable to: | ||||||||||||||
| Owners of the parent | 23,088 | 18,953 | 6,976 | 121,630 | ||||||||||
| Non-controlling interest | 9,486 | 1,906 | 15,226 | 10,162 | ||||||||||
| 32,574 | 20,859 | 22,202 | 131,792 | |||||||||||
| Basic and diluted earnings per share attributable | ||||||||||||||
| to owners of the parent, stated in U.S. dollars | 0.09 | 0.07 | 0.03 | 0.48 | ||||||||||
| Weighted average number of shares outstanding | ||||||||||||||
| (common and investment), in units | 254,186,867 | 254,186,867 | 254,186,867 | 254,186,867 | ||||||||||
| Compañía de Minas Buenaventura S.A.A. and Subsidiaries | |||||||||||||
| Consolidated Statement of Cash Flows | |||||||||||||
| For the six-month periods ended June 30, 2014 and 2013 | |||||||||||||
| For the three-month period ended June 30, | For the six-month period ended June 30, | ||||||||||||
| 2,014 | 2,013 | 2,014 | 2,013 | ||||||||||
| US$(000) | US$(000) | US$(000) | US$(000) | ||||||||||
| Operating activities | |||||||||||||
| Proceeds from sales | 266,880 | 343,935 | 533,734 | 748,397 | |||||||||
| Value Added Tax (VAT) recovered | 21,981 | 19,907 | 39,685 | 33,707 | |||||||||
| Royalties received | 8,429 | 13,976 | 15,424 | 26,178 | |||||||||
| Dividends received | 2,065 | 7,064 | 4,442 | 7,064 | |||||||||
| Interest received | 1,704 | 1,165 | 3,829 | 2,141 | |||||||||
| Payments to suppliers and third-parties | (188,407 | ) | (219,791 | ) | (388,141 | ) | (477,919 | ) | |||||
| Payments to employees | (51,341 | ) | (33,649 | ) | (106,961 | ) | (103,732 | ) | |||||
| Payment of income tax | (12,533 | ) | (30,910 | ) | (17,944 | ) | (54,988 | ) | |||||
| Payment of royalties | (3,513 | ) | (8,708 | ) | (10,966 | ) | (17,494 | ) | |||||
| Payment of interest | (3,505 | ) | (8,193 | ) | (5,453 | ) | (8,415 | ) | |||||
| Net cash and cash equivalents provided by operating activities | 41,760 | 84,796 | 67,649 | 154,939 | |||||||||
| Investing activities | |||||||||||||
| Settlement of financial assets at fair value through profit or loss | - | - | - | - | |||||||||
| Proceeds for collections of loans to associates | 1,426 | 14,964 | 10,458 | 14,964 | |||||||||
| Proceeds from sales of mining concessions, property, plant and equipment | 67 | 3,015 | 90 | 3,015 | |||||||||
| Proceeds from investments settlement | 80 | - | 80 | - | |||||||||
| Acquisitions of mining concessions, development costs, property, plant and equipment | (60,383 | ) | (147,223 | ) | (133,956 | ) | (233,264 | ) | |||||
| Acquisitions of investment properties | - | - | (11,705 | ) | - | ||||||||
| Payment for purchase of investments | - | - | - | - | |||||||||
| Proceeds from sales of investments shares | - | - | - | ||||||||||
| Associates loans granted | (157 | ) | - | (157 | ) | - | |||||||
| Decrease of time deposits | - | 772 | - | - | |||||||||
| Contributions and investments in associates | (472 | ) | (1,475 | ) | (3,685 | ) | |||||||
| - | |||||||||||||
| Net cash and cash equivalents used in investing activities | (59,439 | ) | (128,472 | ) | (136,665 | ) | (218,970 | ) | |||||
| Financing activities | |||||||||||||
| Increase of bank loans | 2,321 | - | 2,321 | - | |||||||||
| Increase in financial obligations | 108,780 | 60,000 | 183,439 | 60,000 | |||||||||
| Bank loans received | - | - | - | ||||||||||
| Payment of financial obligations | (29,053 | ) | (45 | ) | (33,593 | ) | (101 | ) | |||||
| Dividends paid | (2,797 | ) | (76,269 | ) | (2,797 | ) | (76,269 | ) | |||||
| Dividends paid to non-controlling interest | (2,240 | ) | (3,133 | ) | (4,200 | ) | (6,573 | ) | |||||
| Purchase of treasury shares | - | - | - | - | |||||||||
| Purchase of associates' shares | - | (462 | ) | - | (462 | ) | |||||||
| Net cash and cash equivalents provided by (used in) financing activities | 77,011 | (19,909 | ) | 145,170 | (23,405 | ) | |||||||
| Net increase (decrease) in cash and cash equivalents during the period | 59,332 | (63,585 | ) | 76,154 | (87,436 | ) | |||||||
| Cash and cash equivalents at the beginning of the period | 78,720 | 162,861 | 61,898 | 186,712 | |||||||||
| Cash and cash equivalents at period-end | 138,052 | 99,276 | 138,052 | 99,276 | |||||||||
Contact
Lima:
Compañía de Minas Buenaventura S.A.A.
Carlos Galvez, 511-419-2540
Chief Financial Officer
or
Daniel Dominguez, 511-419-2591
Director of Treasury and Investor Relations
daniel.dominguez@buenaventura.pe
or
New York:
i-advize Corporate Communications
Maria Barona / Rafael Borja
212-406-3691 / 3693
buenaventura@i-advize.com
