First Quantum Minerals (TSX: FM) returned to profit in the second quarter, though the headline figure owes more to asset sales than to the underlying business.
Sales revenue rose to $1.52 billion, up from $1.40 billion in the first quarter and $1.23 billion a year earlier. The company posted net earnings of $136 million, or $0.16 a share, reversing a $196 million loss in the prior period.
Strip out one-time items, however, and the gloss fades. On an adjusted basis First Quantum lost $106 million, or $0.13 a share. That was an improvement on the first quarter’s $0.18 adjusted loss, but it underscores how much of the reported profit rested on a $271 million gain from the sale of the Çayeli and Cobre Las Cruces mines.
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EBITDA came in at $400 million, up from $326 million. Operating cash flow, by contrast, fell sharply to $130 million from $420 million.
The balance sheet remains stretched. Net debt edged up to $5.41 billion from $5.28 billion, extending a gradual climb even as $162 million from the asset disposals landed during the quarter.
On the production side, copper output rose 4% to 100,487 tonnes, helped by the S3 circuit at Kansanshi and the first stockpiled ore run through the idled Cobre Panamá plant. Gold production was 32,029 ounces, while nickel slipped 9% to 11,246 tonnes.
That leaves the company tracking toward the lower half of its full year targets. Half-year copper of roughly 197,000 tonnes sits below the midpoint pace of the 405,000 to 475,000 tonne range, which management left unchanged and expects to hit on the back of a stronger second half.
Costs, for now, are running hot. Copper C1 cash cost was $2.54 a pound and all in sustaining cost reached $4.27 a pound, both above the annual guidance ranges of $2.15 to $2.40 and $3.50 to $3.80 respectively.
Chief Executive Tristan Pascall said the miner was “well positioned for improved production” in the back half of the year. Its larger question, the fate of the shuttered Cobre Panamá mine, remains tied up in talks with the Panamanian government.
First Quantum Minerals last traded at $37.51 on the TSX.
