Compania de Minas Buenaventura SAA ((BVN)) has held its Q1 earnings call. Read on for the main highlights of the call.
The recent earnings call for Compania de Minas Buenaventura SAA was marked by an overall positive sentiment, driven by strong financial performance indicators such as EBITDA and net income. The company reported significant increases in silver production and reserves, which contributed to the optimistic tone. However, the call did not shy away from addressing challenges, including reduced copper and gold production, increased debt levels, and cost overruns in the San Gabriel project.
Strong EBITDA Performance
The first quarter of 2025 saw Compania de Minas Buenaventura achieve an impressive EBITDA from direct operations of $126 million, up from $95 million in the same period of 2024. This increase reflects a higher EBITDA margin of 41%, compared to 38% the previous year, showcasing the company’s improved operational efficiency.
Significant Increase in Net Income
The company reported a substantial rise in net income, reaching $140 million in the first quarter of 2025, compared to $61 million in the same quarter of the previous year. This significant increase underscores the company’s strong financial health and successful strategic initiatives.
Increase in Silver Production
Silver production experienced a notable boost, reaching 3.7 million ounces in the first quarter of 2025. This represents a 20% increase compared to the 3.1 million ounces produced in the same period last year, largely driven by the Yumpag operation.
Growth in Reserves
The company reported growth in its reserves, with gold reserves increasing by 482,000 ounces, silver reserves by 61 million ounces, and copper reserves by 253,000 tonnes. This expansion in reserves positions the company well for future production and profitability.
Decrease in All-In Sustaining Cost
The all-in sustaining cost for the first quarter of 2025 decreased by 83% year-over-year. This reduction was driven by lower commercial deductions and higher byproduct credits, reflecting the company’s focus on cost efficiency.
Progress in San Gabriel Project
The San Gabriel project reached 79% overall completion by the first quarter of 2025. Construction is on schedule, with the first gold bar expected to be produced in the fourth quarter of 2025, marking a significant milestone for the project.
Decrease in Copper and Gold Production
Despite the positive financial results, the company reported a decrease in copper production by 21% year-over-year, and gold production fell to 27,980 ounces from 36,593 ounces in the first quarter of 2024. These declines were attributed to reduced inventory at El Brocal and lower production at Tambomayo and Orcopampa.
Increased Debt Levels
The company’s total debt increased to $862 million, influenced by Buenaventura 2032 notes and other outstanding notes. This resulted in a net leverage ratio of 0.46x, highlighting the company’s increased financial obligations.
San Gabriel Project Cost Overrun
The San Gabriel project experienced a cost overrun, with total CapEx rising to between $720 million and $750 million due to unexpected geotechnical and hydraulic issues. This has prompted a revised CapEx guidance for the year.
Forward-Looking Guidance
Looking ahead, Compania de Minas Buenaventura expects to maintain its strong financial performance, with a focus on completing the San Gabriel project and commencing its ramp-up phase in Q3 2025. The company anticipates continued growth in silver production, while addressing challenges in copper and gold production. The revised CapEx guidance for the San Gabriel project is set between $220 million and $250 million, reflecting the company’s commitment to managing its capital expenditures effectively.
In conclusion, Compania de Minas Buenaventura’s earnings call highlighted a robust financial performance, with significant gains in EBITDA, net income, and silver production. Despite facing challenges such as decreased copper and gold production and increased debt levels, the company’s strategic initiatives and project progress, particularly in the San Gabriel project, underscore its potential for future growth and profitability.