Mexican Mining Companies Report Losses in 1Q20, Remain CautiousBy MBN Staff | Mon, 05/11/2020 - 16:52
While in the US and Canada the mining industry is open, in Mexico companies had to shut down their operations as the government does not consider the sector an essential activity. The impact is not minor and it has already led to losses for 1Q20.
Industrias Peñoles reported an operating flow (EBITDA) of US$175.4 million in 1Q20, 36 percent below that registered in the same period last year. The company, chaired by Alberto Baillères, said this drop is partly due to a lower volume of precious metals sales, especially silver. The company's revenue between January and March this year was US$41.1 million, 9.3 percent below what was recorded in the same period last year. The company's net profit was negative US$139.6 million.
Meanwhile, during 1Q20, Frisco recorded a net loss of US$193 million. These results included financial costs of US$263 million, mainly exchange losses and interest payments. Revenue from the Carlos Slim-owned company fell 13 percent to about US$92 million on lower gold and silver sales, while EBITDA increased 16 percent to US$20 million. “At the end of 1Q20, the consequences for the operations of Minera Frisco and subsidiaries were uncertain. However, the possible impacts on its financial situation and on its cashflows will largely depend on the effects on both local and globalized markets, as well as the capacity to react and adopt all economic conditions,” said the company in the report.
The drop in copper prices also affected Grupo México. The company reported a 3.3 percent drop in sales for 1Q20 compared to the same period last year. The company's sales during this period amounted to US$2.45 billion. This decrease was influenced by a 9.2 percent drop in the copper price, mitigated by an increase of 4.3 percent in production volume and a 6.6 percent soar in transported volume.
The company highlighted that industrial mining is closely linked with the chemical industry and the construction of electrical, hospital and medical infrastructure, as well as with the manufacture of supplies and technological equipment for health.