Strong dollar impacts Minera Autlán results

Mexican manganese and ferroalloy producer Minera Autlán reported a third quarter net loss of 47.0mn pesos (US$3.48mn), compared to a net loss of 16.3mn pesos in the same period of 2013.

The results were impacted by higher financial costs of 107mn pesos, up from 39.8mn pesos over the same period last year.

The higher costs were mainly due to the US dollar's appreciation against the peso, which resulted in exchange rate losses of 40mn pesos and higher interest payments on debts linked to the acquisition of hydro power firm Compañía de Energía Mexicana in January.

SALES UP

Net sales in the quarter increased 26% to 1.22bn pesos, due to higher sales volumes in Autlán's mining, ferroalloy and chemicals divisions, as well as improved ferroalloy prices.

The cost of sales was 966mn pesos, up 17% on 3Q13. It represented 79% of net sales, down 6.1 percentage points from the year-ago quarter, partly due to improved operating efficiency.

The lower percentage was also helped by constant water flows which enabled Autlán's hydro power division to generate 39% more energy in the quarter, supplying 30% of the company's needs and saving 61.2mn pesos.

MONEX ANALYSIS

Autlán performed well in the quarter, helped by the expansion of its Nonoalco mine, according to a note by Monex analyst Fernando Bolaños, with Ebitda up 116% to 183mn pesos from 85mn in 3Q13. Monex maintained its price target of 14.5 pesos for Autlán shares and its 'sell' recommendation.