Oriental Peninsula income down in Q2

MANILA, Philippines - Publicly-listed Oriental Peninsula Resources Group Inc. (ORE) reported a 26-percent drop in net earnings in the first half of 2013 to P352.38 million from P475.58 million in the same period last year due to lower sales and higher production costs.

In the first semester of 2013, ORE revenues fell to P1.35 billion from P1.41 billion in 2012. Revenues from sale of ore fell to P1.34 billion from P1.41 billion in 2012.

Cost and expenses in the first semester of the year rose to P997.73 million from P931.69 million year-on-year.

ORE’s net income for the quarter ending June 2013 was slashed by half to P155. 42 million from P312.75 million registered in the same period in 2012.

Revenues in the second quarter, likewise, fell to P695.22 million from P791.82 million in the same period last year.  The company’s revenues from sale of ore during the period fell to P686.82 million from P792.86 million in the same period last year.

Costs and expenses rose to P539.79 million in the second quarter of the year from P479.07 million a year ago.

“Year 2013 is anticipated to be more challenging as the past years with the continuous price fluctuation in the London Metal Exchange (LME), over supply with less demand, and the competition posed by the mining companies abroad is tough,” the company said.

Without specifying the volume, the company said it shipped 45 vessels of nickel laterite ore to China, Japan and Australia while only 26 vessels were loaded in the same period last year.

“Continued cost control is strictly implemented to overcome revenue declines that the price fluctuation brought,” it added.

ORE obtains revenues mostly from its subsidiary Citinickel Mines and Development Corp. which operates two nickel mines located in the municipalities of Narra and Sofronio Espanola in Palawan.

Low metal prices have dragged down the earnings of several local mining firms in the first semester of the year.

Nickel, a key component in producing steel, is currently in oversupply in nickel producing countries amid lower demand, causing depressed prices.