Volcan Compañía Minera (VOLCABC1) Q2 2024 earnings summary

Executive summary

• Reinforced safety strategy with contractor alignment and critical control verification at key sites; on-site monitoring of compliance procedures continued.

• Revenue for H1 2024 was $394.97M, down from $434.42M in H1 2023, with a net loss of $8.82M compared to a net loss of $11.04M in H1 2023.

• Comprehensive income for H1 2024 was $77.91M, a significant improvement from a loss of $8.82M in H1 2023, driven by unrealized gains on derivatives and investments.

• Major asset sales included the sale of Hidroeléctrica Huanchor S.A.C. for $46.8M and Empresa de Generación Energética Rio Baños S.A.C. for $31.68M.

• Transaction completed for Transition Metals AG to acquire a controlling stake from Glencore; portfolio optimization and asset disposals ongoing.

Financial highlights

• 2Q24 sales reached USD 218.3 million, up 2.3% year-over-year, despite lower production volumes.

• EBITDA for 2Q24 was USD 87.2 million, a 77% increase from 2Q23, with EBITDA margin rising to 40%.

• Net profit for 2Q24 was USD 10.4 million, reversing a net loss of USD 11.9 million in 2Q23.

• Gross margin improved to 25% in 2Q24 from 12% in 2Q23.

• Cash and cash equivalents increased to $68.02M as of June 30, 2024, from $61.64M at year-end 2023.

Outlook and guidance

• Ongoing focus on cost control and operational efficiency, with further reductions in sustaining capex and prioritization of growth projects.

• Romina Project development progressing, with phased capex and ramp-up planned through 2026.

• Portfolio optimization expected to generate USD 120–170 million from asset disposals.

• The company expects the spin-off of its 40% stake in Cosco Shipping Ports Chancay Perú S.A. to be completed in 2024.

• The sale of Hidroeléctrica Huanchor S.A.C. is expected to close within 90 days, pending regulatory approval.