* Sees no impact from Southern Copper judgment
* Shares retreat after modest gains
MEXICO CITY Oct 24 Mexican copper miner and
railroad operator Grupo Mexico reported a
third-quarter profit on Wednesday of $311 million, down 54
percent on a double-digit decline in metals prices.
Earnings in the same period last year totaled $676 million.
The company said revenue for the July-September period was
$2.4 billion, compared with $2.8 billion in the same period last
year. Grupo Mexico files results to the Mexican stock exchange
The company said that for the quarter silver prices were
down 22.5 percent, molybdenum prices were down 19.2 percent,
lead prices were down 19.6 percent, and copper prices were down
Net income for the company's mining division was hardest
hit, down $443.5 million, or 64.8 percent, in the quarter.
Sales for the first nine months reached $7.688 billion, down
3 percent year on year.
"It's a weak report as expected," said Juan Baptista Bruny,
a Mexico City-based analyst with BBVA Bancomer.
The company said copper production was up 9.1 percent during
the first nine months of the year, in large part because of a 19
percent increase in output at its flagship Buenavista mine,
previously known as Cananea.
Compared with the same quarter last year, copper output was
down nearly 2 percent, Molybdenum output was down 6.5 percent,
and gold output was down 12.8 percent.
At Grupo Mexico's Toquepala mine in southern Peru,
Molybdenum production fell 38 percent for the quarter.
Molybdenum is a metal that is commonly used as a component in
The company, which paid a $2 billion legal judgment to
Southern Copper Corp earlier this month, said the net
impact of the judgment totaled about $395 million.
Grupo Mexico, which owns about 80 percent of Southern
Copper, said in its report that it continues to disagree with
the judgment but that it "represents no significant economic
effect on the company's financial situation."
The company's chief financial officer, Daniel Muniz, said on
Wednesday that Grupo Mexico sees no further legal action in the
case since the Delaware Supreme Court affirmed the lower court's
$2 billion judgment in late August.
"We don't have an additional remedy to take," Muniz said on
a conference call with analysts, implicitly rejecting an appeal
to the U.S. Supreme Court. "That's why we decided to ... comply
with the judgment and put this behind us."
Despite the decline in metal prices, Grupo Mexico cast its
industry's future in a positive light, noting an 81 percent
increase in its own investment projects compared with the same
period last year.
"We believe the fundamentals in our industry will remain
solid, mainly due to the lack of (metals) supply," the company
said in its report.
Grupo Mexico said it would pay a cash dividend of 0.26
Mexican pesos per outstanding share on November 7, a figure that
BBVA Bancomer's Bruny said he had expected to be higher.
Shares traded 0.43 percent lower at 41.27 pesos on Wednesday
afternoon on the Mexican stock exchange.