Compania de Minas Buenaventura SA (BVN), a Peru-based precious metals producer, Friday reported an 8 percent decline in first-quarter profit, hurt mainly by increased operating costs while revenues remained flat.
Chief Executive Roque Benavides said, "The company reported higher operating costs and expenses in 1Q12, while sales remained flat, which led to lower than expected results."
The Lima, Peru-based company's attributable first-quarter net income dropped to $207.5 million or $0.82 per share, from $224.8 million or $0.88 in the same quarter last year.
On average, three analysts polled by Thomson Reuters expected earnings of $0.86 per share for the quarter. Analysts' estimates typically exclude unusual gains and losses
Buenaventura said its total income, which includes net sales and royalty income, for the quarter remained relatively flat at $377.0 million compared to $375.7 million last year. Net sales for the quarter inched down to $359.0 million from $363.5 million last year. Analysts estimated revenues of $390.02 million for the quarter.
Buenaventura said lower prices and volumes sold for base metals, such as copper, lead and zinc, offset higher prices realized for gold.
Total operating costs for the quarter increased to $195.3 million from $169.6 million last year. General and administrative expenses rose 76 percent to $29.8 million, due to a higher long-term compensation provision and increase in worker's profit sharing.
Buenaventura's gold production for the quarter increased 1 percent to 117,852 ounces, while average realized gold price rose 24 percent to $1,721 per ounce from last year. The company sold 127,017 ounces of gold in the quarter, compared to last year's 120,426 ounces.
Silver production for the quarter rose 14 percent to 4.0 million ounces, mainly due to higher production from Uchucchacua. Average realized silver price for the quarter increased to $32.20 per ounce from $31.78 ounce last year. However, silver sold for the quarter dropped 24 percent to 2.8 million ounces compared to 3.7 million ounces last year.
The company also realized lower prices for base metals, as lead price dropped 20 percent, zinc price decreased 16 percent and copper price fell 13 percent, from last year.
BVN closed Friday's trading on the NYSE at $42.30, up $0.70 or 1.68%, on a volume of 0.9 million shares.
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