NV recorded a 92-million ($121-million) loss in the first
half of the year as weaker base and precious metal prices,
operational outages and restructuring charges weighed on
The loss was bigger
than the 63-million loss in the second half of last year
and a 32-million loss in the first six months of
Weaker base metal
prices were partially offset by a strategic options hedge
opened in the first half, the Zurich-based company said July
25, while it also hedged a portion of its gold and silver
production to offset potentially lower prices in the second
The groups metal
processing unit generated earnings before interest, taxes,
depreciation and amortization (Ebitda) of 74 million ($98
million) in the first half, up 32 percent from a year ago as
the one-off termination fee for its offtake agreement with
Glencore offset a loss of revenue during planned maintenance
operations produced 519,000 tonnes of zinc in the first half,
down 5 percent from the previous six months, but lead
production rose 18 percent to 86,000 tonnes.
Mined production of
zinc concentrate, copper concentrate, gold and silver were down
9 percent, 3 percent, 52 percent and 17 percent,
The mining units
first-half Ebitda of 33 million ($39.7 million) was down
55 percent as weaker metal prices and operational issues at the
Campo Morado Mine in Mexico weighed on profitability and
The groups net
results also were negatively affected by charges related to a
cost-cutting program and the restructuring of the company into
three business segments: mining, metals processing, and
marketing, sourcing and sales.
smelting group manager Mike Giunti left the company earlier
this month as part of the restructuring, while chief operating
officer Greg McMillan stepped down last month.
Roland Junck, chief
executive officer, said the company is confident that the
restructuring and cost-cutting drive will enable it to improve
its operational performance and increase margins through the
marketing, sourcing and sales unit.
"We have previously
spoken of the likelihood of continued short-term volatility in
commodity markets, with conditions in (the first half) evidence
of this, and if this continues into (the second half) our
earnings will continue to be adversely affected," Junck said.
"Having said that, we remain confident in the medium and
long-term fundamentals of zinc and other related commodity
A version of this article was first published by AMM sister
publication Metal Bulletin.