Weakening peso to boost Philex Mining revenues
PHILEX MINING Corporation is seen to benefit from the current weakening of the peso, according to Philex Mining Chairman Manuel V. Pangilinan.
Mr. Pangilinan said the listed miner is the “main beneficiary” of the tumbling peso which touched the P50-level during the intraday trade on Thursday before recouping some losses to close at P49.98 per dollar.
“The main beneficiary is Philex, because all of its revenues are denominated in dollars so they generate around give or take $230 million. Revenues are all in dollars and everything’s converted to peso, there expenses is also mainly in pesos,” he told reporters at the sidelines of the MVP Bossing Awards 2016 in Taguig City late Wednesday.
Statistically, for every peso decline, Mr. Pangilinan noted that “it raises the pre-tax income of Philex to the tune of around P200 million a year.”
In 2015, the peso closed at P47.06 against the greenback.
The country’s largest gold and copper producer saw its net income attributable to equity holders of the parent rose 59% to P1.36 billion in the January to September period from P851 million a year ago on the back of improved production in its Padcal mine in Benguet coupled with favorable gold prices and higher copper output.
Nine-month core net income stood at P1.33 billion, 64% higher than the previous year’s P811 million.
Mr. Pangilinan said “slightly better production volume, better gold prices and... cost-cutting in cash expenses” could push Philex’s income to over a billion this year.
“First months, their earnings are up... so a combination of those factors. I think they’ve reported a hundred million in net profits for the first nine months, so they’ll exceed a billion this year,” he added.
The listed miner’s revenues jumped 7% to P7.705 billion during the January to September period, from P7.17 billion a year ago. Revenues from gold rose 10% to P4.8 billion, while copper revenues went up 3% to P2.84 billion.
At the same time, Mr. Pangilinan, who is also chairman, president and CEO of PLDT, Inc., said the weak peso is “mildly positive” for the telecommunications giant.
“( The effect is) basically neutral if not mildly positive,” he said, because PLDT “still has a significant international revenue stream.”
Mr. Pangilinan, who is chairman of Metro Pacific Investments Corp. (MPIC), said he does not expect it to have any effect on the listed holding company.
“[ For] Metro Pacific, no, because our revenues are in pesos and most of our expenses are in pesos and the debts of Metro are all in pesos,” he said.
Philex Mining is one of three key Philippine subsidiaries of First Pacific Co. Ltd., the others being MPIC and PLDT. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld.
Shares in Philex closed at P8.27 each on Thursday, down from its previous finish of P8.28 apiece. —