July 31, 2008 / 2:13 PM / 9 years ago

HudBay profit falls on lower prices, higher costs

2 Min Read

OTTAWA (Reuters) - Second-quarter profit at HudBay Minerals dropped 52 percent reflecting lower zinc prices and higher copper concentrate costs along with planned lower copper sales and a stronger Canadian dollar.

The mid-tier base metals miner said late on Wednesday that it earned C$33.2 million ($32.5 million), or 26 Canadian cents a share, in the quarter ended June 30.

That was down from $69.1 million, or 55 Canadian cents, in the year-before period.

Analysts had expected a profit of 25 Canadian cents a share before exceptional items, on average, according to Reuters Estimates.

Revenue fell 21 percent to C$284 million.

Shares in the Winnipeg, Manitoba-based company fell 2 percent, or 22 Canadian cents, to C$9.88 in early activity on the Toronto Stock Exchange on Thursday.

The company produced 17,384 tonnes of copper in the quarter, down 23.5 percent, while zinc production rose 9 percent to 33,672 tonnes.

The company said it cut copper smelter production to meet government air release targets for sulphur dioxide.

"Production is tracking well in relation to our full year," Chief Executive Allen Palmiere said in a statement. "We are seeing excellent results from our exploration program."

Operating cash flow was C$70.7 million, down from C$137.6 million in the year-prior period.

HudBay said last month it planned to buy Skye Resources for about C$400 million to acquire the company's Fenix nickel project in Guatemala.

HudBay has three mines, a smelter, and concentrators in the Flin Flon greenstone belt in Manitoba. It also has operations in Ontario, Michigan, and New York State.

($1=$1.02 Canadian)

Reporting by Susan Taylor; Editing by Scott Anderson

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