MVP-led Philex profit falls 53% on Padcal mine closure

Posted at 10/31/2012 9:59 AM | Updated as of 10/31/2012 5:13 PM

MANILA, Philippines - Profits of Philex Mining Corp., the country's biggest gold producer, were more than halved in the nine months to September from year-ago levels after the company suspended operations in its Padcal mine last August. 

The Padcal mine has been closed since August, after aover 20 million metric tons of mine tailings spilled from its pond into the Balog creek, and the Agno River, one of the country's largest rivers. 

Net income of Philex fell by 53% to P2.035 billion in the first three quarters from P4.351 billion last year, while core net income declined by 43% to P2.262 billion from P3.976 billion.

Revenues of the firm slid by 23% to P8.68 billion from P11.220 billion, while costs and expenses climbed by 2% to P5.405 billion from P5.277 billion.

"This year’s results reflect lower gains due to a drop in metal production after the Company voluntarily suspended its operations on August 1 following the leakage from the tailings pond of its Padcal Mine in Benguet due to a force majeure event from historically unprecedented heavy rains brought about by typhoons Ferdie and Gener," Philex said in a disclosure.

Manuel V. Pangilinan, Philex chairman and chief executive officer, said that despite the decline in profits, the company's performance was better than expected after the suspension in its Padcal operations.

"There were struggles, but I am pleased that the company responded positively to the accident. I have always believed that the more than 2,200-strong Philex employees would respond to the challenge with courage and unity – as has been the mark of our employee corps historically," Pangilinan said.

Philex still faces a P1-billion fine imposed by the Mines and Geosciences Bureau for the tailings leak.