First Majestic Silver’s profit down sharply on sales suspension
TORONTO (miningweekly.com) – TSX-listed First Majestic Silver’s second-quarter net profit plunged 99% year-on-year to $200 000, from $15.3-million, mainly as a result of suspending silver sales in reaction to sharply lower prices for the white metal.
For the three months ended June 30, the Vancouver-based company reported net earnings of nil cents a share and, excluding special items, reported an adjusted income of $0.07 a share, on target with analyst expectations.
First Majestic, which is focused on its operations in Mexico, said profit would have been about $7.6-million, or $0.06 a share, higher, without the sales curtailment.
Revenue was $48.4-million, down 12% year-on-year when compared with $54.8-million.
The average realised silver price fell 23% to $22.19/oz in the quarter. On Tuesday, spot silver prices traded at $21.44/oz in New York.
"Despite the weak silver price environment, First Majestic achieved a new quarterly record in silver production and continues to demonstrate its commitment to maximising shareholder value. The silver price fell 31% during the second quarter, which is equal to the largest quarterly drop during the 2008 financial crisis and the third-largest quarterly drop in the past 50 years,” president and CEO Keith Neumeyer said.
"As such, management decided to suspend a portion of silver sales to await a rebound in prices. While the suspension had a negative impact on this quarter's revenues and earnings, we are confident the silver price will revert back to the mean in the near future,” he added.
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