trending Market Intelligence /marketintelligence/en/news-insights/trending/juAiCsxQOL9nwwdjrfthkA2 content esgSubNav
In This List

Lundin swings to Q1 loss on lower commodity prices; FY'16 output guidance revised

Blog

Essential IR Insights Newsletter - April 2023

Podcast

Masters of Risk | Episode 2: A Discussion with Ilya Khaykin

Video

According to Market Intelligence, April 2023

Video

Discover the Power of S&P Capital IQ Pro


Lundin swings to Q1 loss on lower commodity prices; FY'16 output guidance revised

Lundin MiningCorp. swung to a net loss attributable to shareholders of US$22.1million, or 3 U.S. cents per share, in the first quarter, from a profit of US$71.8 million,or 10 cents apiece, the company said April 27.

Net income was impacted by lower operating earnings, lowerincome from investment in Tenke and foreign exchange losses, which were partiallyoffset by a lower depreciation, depletion and amortization expense and lowernet tax expense.

Operating earnings dropped by US$122.3 million on a yearlybasis to US$151.7 million in the quarter.

Sales for the quarter dropped to US$369.6 million, comparedto US$531.5 million a year ago. The decrease was primarily due to lower metalprices, net of price adjustments, lower sales volumes and the shutdown of theAguablancaoperations.

Sales revenue was down across all of the company'soperations other than the Zinkgruvan mine. The Candelaria mine generated revenue of US$206.7million, down from US$292.2 million a year ago, while mine sales dropped toUS$53.2 million, from US$88.4 million in the prior year.

Lower prices impacted sales of almost all commoditiesproduced by the company. Revenue from copper dropped to US$258.2 million, fromUS$354 million, and nickel revenue was down to US$22.7 million, from US$75.7million, on a yearly basis.

Lundin produced 65,179 tonnes of copper, 40,383 tonnes ofzinc, 5,968 tonnes of nickel, 11,735 tonnes of lead, 19,000 ounces of gold and1.4 million ounces of silver in the first quarter. Year-ago production stood at76,746 tonnes of copper, 35,757 tonnes of zinc, 10,052 tonnes of nickel, 8,719tonnes of lead, 22,000 ounces of gold and 1.5 million ounces of silver.

The company revised its production and cost guidance for2016 and now expects total attributable copper production of between 249,300tonnes to 261,800 tonnes, compared to the previous guidance of 245,500 tonnesto 259,000 tonnes, due to higher production expected at the Candelaria mine,which will be partially offset by lower production at the Zinkgruvan and Tenkemines.

The company also revised the copper production costestimates for the Candelaria and Neves-Corvo mines.

Nickel production guidance was retained at 21,000 tonnes to24,000 tonnes; however, the cost estimate was reduced to US$2.00 per pound,from US$2.25 per pound previously.

Zinc output guidance was retained at 145,000 tonnes to155,000 tonnes.

Capital and exploration expenditures for 2016, excludingTenke, are expected to be US$220 million and US$40 million, respectively.

The estimates of Lundin's share of sustaining capitalfunding at Tenke remained unchanged from the previous guidance at US$25 millionfor 2016; however, the company now expects to receive higher cash distributionsfrom Tenke in the year of about US$50 million to US$60 million, a US$20 millionjump over the previous guidance due to an increase in copper prices.