Hudbay Minerals ((TSE:HBM)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Hudbay Minerals’ recent earnings call presented a largely positive sentiment, underscored by its robust financial performance, record production figures, and substantial debt reduction. The company showcased its strategic advancements, including the promising Copper World project, which bolsters its future prospects. However, the call also highlighted operational challenges in Peru and British Columbia, casting a slight shadow over the otherwise optimistic outlook.
Record Financial Performance
Hudbay Minerals celebrated a year of record financial achievements in 2024, with revenues surpassing $2 billion and generating over $350 million in free cash flow. These results were driven by strong operational execution and disciplined capital management, reflecting the company’s solid financial footing.
Gold Production Exceeds Guidance
A standout achievement came from Hudbay’s Manitoba operations, where gold production reached record levels, surpassing the top end of the guidance range with a 14% increase from 2023. This surge in gold production contributed to 35% of the company’s total revenues in 2024, up from 29% the previous year.
Debt Reduction and Balance Sheet Transformation
The company significantly reduced its debt by over $500 million, ending the year with $582 million in cash and cash equivalents. This strategic move transformed Hudbay’s balance sheet, positioning it with the lowest leverage among its peers.
Copper World Project Progress
Hudbay’s Copper World project in Arizona is advancing well, having received final key permits. The project is moving through feasibility studies and involves a minority joint venture partner, promising future growth in copper production.
Strong EBITDA Growth
Hudbay reported a substantial increase in its fourth-quarter adjusted EBITDA, reaching $257 million, a 25% rise from the previous quarter. This contributed to a full-year 2024 adjusted EBITDA of $823 million, a significant increase from $648 million in 2023.
Reduced 2025 Production Guidance in Peru
Looking ahead, Hudbay has adjusted its 2025 production guidance for Peru, citing more mining dilution and ore loss than planned in Pampacancha. This adjustment affects expectations for both copper and gold production.
Challenges in British Columbia Operations
Hudbay faced difficulties in its British Columbia operations, with full-year copper production falling below guidance due to lower grades in stockpiled ore and reduced throughput amid stabilization and optimization efforts.
Forward-Looking Guidance
For 2025, Hudbay provided guidance indicating stable consolidated copper production at approximately 133,000 tons and projected gold production of 278,000 ounces. The company expects cash costs for copper to range between $0.80 to $1.00 per pound, with all-in sustaining costs between $2.60 and $2.65 per pound. Capital expenditures are forecasted at $485 million, reflecting increased investment in growth and sustaining capital.
In summary, Hudbay Minerals’ earnings call painted a picture of strong financial health and strategic progress, despite some operational hurdles. The company’s record performance, debt reduction, and advancements in projects like Copper World highlight its potential for future growth, maintaining an overall positive sentiment.
