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[Ferro-Alloys.com]Mexican ferromanganese producer Minera Autlán reported net profits of 32.4mn Mexican pesos (US$2.62mn) in the second quarter of 2014, compared to a net loss of 84.1mn pesos in the prior year period.
Net sales were 1.144bn pesos, up from 871mn pesos, lifted by higher ferroalloy, mining and chemicals output, higher ferroalloy prices and the depreciation of the peso against the US dollar, the company said in its Q2 earnings report.
Ferroalloy production was 56,700t, up from 54,000t, with mining volumes up to 33,700t from 27,700t and production from the company's Nonoalco mining division at 3,500t, up from 3,200t.
The cost of sales was 920mn pesos, or 80% of revenues, compared to 741mn pesos or 84.7% of revenues in 2Q13. The reduction in the percentage was partly due to the strong performance of hydroelectric power subsidiary Compañia de Energía Mexicana (CEM), which generated 30% of Autlán's energy needs, saving about 40.2mn pesos in the first half of the year.
Autlán plans to generate sufficient energy to meet its own needs and possibly sell excess power to third parties, partly through the acquisition of CEM in January.
OUTLOOK
The company expects higher global steel demand in 2014, with prices of manganese and ferroalloy likely to remain around current prices for the rest of the year. Autlán will continue to focus on reducing costs and adjusting ferroalloy production levels to demand, the company added.
Following strong growth in the quarter, Monex increased the target price of Autlán's shares by one peso to 14.5 pesos, but maintained the 'SELL' recommendation for the stock, according to a note by analyst Fernando Bolaños.
Minera Autlán, based in Mexico's Nuevo León state, supplies products to the steel, battery manufacture, ceramic and fertilizer industries.
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- [Editor:Sophie]
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