Bloomberg News

Buenaventura Profit Beats Estimates on Prices, Expenses

February 28, 2012

Cia. de Minas Buenaventura SA, Peru’s biggest precious-metals producer, said fourth-quarter profit rose 1 percent on higher precious metals prices and lower provisions, beating analysts’ estimates.

Net income rose to $231 million, or 91 cents a share, from $228 million, or 90 cents, in the year-earlier period, Lima- based Buenaventura said today in an e-mailed statement. Analysts expected profit of 82.3 cents a share on an adjusted basis, according to the average of three estimates compiled by Bloomberg.

Buenaventura sold gold at an average of $1,569 per ounce in the quarter, 27 percent higher than a year earlier, while silver rose 22 percent as investors bought precious metals as an alternative to a weakening dollar. Buenaventura cut its general and administrative expenses by 43 percent to $16.3 million after reducing long-term compensation provisions.

“Their equity stakes performed better than originally expected,” Isabel Darrigrandi, an analyst at Celfin Capital SA in Santiago, said in a telephone interview before the report was released. “The company also benefitted from strong gold and silver prices.”

Darrigrandi, who doesn’t own Buenaventura shares, rates the stock a “buy.”

Buenaventura has a 44 percent stake in Newmont Mining Corp. (NEM)’s Yanacocha gold mine and a 19 percent stake in Phoenix- based Freeport-McMoRan Copper & Gold Inc. (FCX)’s Cerro Verde (CVERDEC1) copper mine, which contributed $125.6 million toward earnings, 10 percent higher than a year earlier.

Silver Gains

Revenue climbed 1 percent to $402.3 million. Gold production fell 2 percent to 270,659 ounces. Silver output jumped 16 percent to 4.04 million ounces, while zinc and lead gained 40 percent and 4 percent, respectively, Buenaventura said.

Gold futures for April delivery rose 0.8 percent, to $1,788.40 an ounce today on the Comex in New York. Silver gained 4.5 percent to $37.205.

Buenaventura’s American depositary receipts, each representing one ordinary share, rose 46 cents, or 1.1 percent, to $42.06 in New York. The ADRs have gained 9.7 percent this year. The report was released after the close of regular trading today.

(Buenaventura will hold its quarterly conference call Feb. 29 at 10 a.m. New York time. To call from outside the U.S.: 1- 973-582-2710, Code: 41959706. For U.S. participants: 1-888-693- 3477.)

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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