Second Quarter Reality

 

 

As many of you are aware, Hudbay held a conference call yesterday morning to announce their results from the second quarter for 2015.

Hudbay reported a net loss of $55.2 million and a loss per a share $0.24.

Analysts had predicted a day earlier that shareholders could expect a positive return on their investments of $0.10 per a share.

In the second quarter of 2014, Hudbay reported a profit of $300,000

As a result of this announcement, the bottom fell out of Hudbay shares.

At the start of trading that morning, the values of Hudbay shares were worth $8.56.

At closing they had tumbled to a loss of $0.70 per a share to $7.86.

The value of Hudbay Minerals had diminished by an incredible 8.18% in one day.

What went so terribly wrong?

In the second quarter report Hudbay blamed part of their losses on the pension expense arising from a new collective bargaining agreement with their Flin Flon employees.

What we find puzzling is there is no mention in that report of the amount of money wasted on a contingency plan that has been in place since the middle of April.

From our calculations it is costing Hudbay $1.5 million dollars a month.

The cost for the security firm, room and board at the Victoria Inn, bus contract, and scab labour is astronomical every month.

Hudbay claims that their Constancia project in Peru is now ramped up and near full production.

Hudbay also claims that the strike of the IAM is not affecting production of their Flin Flon operations.

How can any of this be true after suffering such massive losses?

Who does Hudbay really think they are fooling?

Also in the report Hudbay states that for the second quarter in 2015, ore processed in their Manitoba Operations was 3% higher compared to the same period of 2014.

This is nothing but another misleading smokescreen by Hudbay to try to minimize the effect this strike is having on the bottom line.

In the second quarter of 2014, the Reed and Lalor Lake Mines were still in the development stages with minimal ore production. The only mine in full production was 777 and its sister 777 North.

Now in 2015, Reed and Lalor are at full production.

With two more mines producing ore, shouldn’t this bolster production by 200%.

How could anyone see this as a gain of 3%, when in actuality it is a loss of 197%?

Doesn’t this seem more along the lines of 55 million dollar loss?

The IAM was on strike for 2 of the 3 months of the second quarter.

Hudbay had one month at full production.

If this strike continues for the next full three months of the third quarter, what kind of loss can shareholders expect?

No matter what Hudbay wants you to believe, this strike is crippling this company.

55 million is only the beginning….where will it end?