Microsoft Word - 2015 - 0225 Philex press release cover FIRST PACIFIC COMPANY LIMITED

第一太平有限公司

(Incorporated with limited liability under the laws of Bermuda)

Press Release

Wednesday, 25 February 2015

Philex 2014 profitability improved despite low grades and weak metal prices

The attached press release was released today in Manila by Philex Mining Corporation ("Philex") (PSE: PX), in which First Pacific Group holds an economic interest of approximately 31.2%*.

Philex is a Philippine-listed company engaged in the exploration and mining of mineral resources and, through a listed subsidiary Philex Petroleum Corporation (PSE: PXP), in oil and gas exploration.

Further information on Philex can be found at www.philexmining.com.ph

* Two Rivers Pacific Holdings Corporation, a Philippine affiliate of First Pacific, holds an additional 15.0% economic and voting interests in Philex.

* * *

For further information, please contact:

John Ryan Tel: +852 2842 4355

Executive Vice President Mobile: +852 6336 1411

Group Corporate Communications

Sara Cheung Tel: +852 2842 4336

Vice President

Group Corporate Communications

PRESS RELEASE 2014 PROFITABILITY IMPROVED DESPITE LOW GRADES AND WEAK METAL PRICES HIGHLIGHTS

• 2014 CORE NET INCOME AT P1.122 BILLION vs P1.081 BILLION IN 2013

• 2014 REPORTED NET INCOME AT P703 MILLION vs P312 MILLION IN 2013

• PRODUCTION OF METAL INCREASED 5% FOR GOLD AND 9% FOR COPPER

• OPERATING REVENUES UP 4% TO P10.898 BILLION

• EARNINGS PER SHARE GREW 189% TO 20.4 CENTAVOS

• FINAL CASH DIVIDEND OF P0.02 PER SHARE. TOTAL DIVIDENDS OF P0.05 FOR 2014

• END-2014 PARENT DEBT AT P4.308 BILLION; P500 MILLION RETIRED IN EARLY 2015

• SILANGAN PROJECT ON TRACK TO COMPLETE DEFINITIVE FEASIBILITY STUDY IN 2015

Manila, Philippines - The Board of Directors of Philex Mining Corporation (PSE:PX) (the "Company"

or "PX") today announced that its audited financial statements for the year ended December 31,

2014 showed a Core Net Income of P1.122 billion, 4 percent higher than 2013's P1.081 billion, after excluding exceptional gains and losses realized for both years. Reported Net Income for the year

reached P703 million, more than double that of P312 million reported in 2013. The improved

profitability was driven by an increase in revenues, due to higher number of operating days, coupled with cost streamlining despite lower ore grades and weakness in metal prices.

Production and Revenues

Padcal operated for a full year in 2014 compared with only about ten (10) months in 2013, delivering a 23-percent increase in tonnage. However, lower metal grades resulted in moderate improvements in metal output. Specifically, gold output in 2014 increased 5 percent to 105,008 ounces, which yielded 6% higher revenues at P5.889 billion despite the 2-percent drop in realized gold price to US$1,270 per ounce from US$1,297. Similarly, copper production improved 9 percent to 35,391,154 pounds and contributed P4.615 billion in revenues, despite 9 percent lower realized prices for copper at US$2.98 per pound from US$3.27 per pound in 2013.

Revenues from silver, coal, petroleum and others, which comprised the remainder of revenues, rose

31 percent to P394 million from P300 million in 2013 due mainly to increased production from Galoc

oil field's Phase II project.

Total revenue for the year totaled P10.898 billion, 4 percent higher than 2013.

Production Costs and Expenses

Meanwhile, growth in consolidated operating costs and expenses was contained at 12 percent to P8.415 billion in 2014 despite the 20 percent increase in operating days for the year. This resulted from the Company's cost management and operational enhancement initiatives, which brought general and administrative expenses down to P943 million - 28 percent lower than 2013 - and partially offset the rise in production costs associated with higher operating days.

Other charges amounted to P579 million in 2014, 54 percent lower than P1.247 billion reported in

2013 due particularly to the absence of impairment loss on available for sale (AFS) financial assets

related to the Company's investments in listed mining shares and maintenance costs accumulated

during Padcal's suspended operations. Other charges in 2014 consisted mainly of reorganization costs and provisions for write-down of exploration assets, which was partially offset by the gain on the sale of the Pasig property.

EBITDA, Earnings per Share and Dividends

Consolidated EBITDA in 2014 amounted to P3.320 billion (EBITDA Margin on Net Revenue at 33%) versus 2013's EBITDA of P3.920 billion (EBITDA Margin on Net Revenue at 40%). Earnings Per Share almost tripled to 20.4 centavos from 6.9 centavos in 2013.

With this year's performance, the Board approved the declaration of Cash Dividends amounting to

2.0 centavos per share (P0.02/share) payable on March 25, 2015 to shareholders of record as of

March 11, 2015. This brought total Cash Dividends declared in 2014 to five centavos per share

(P0.05/share), equivalent to 22% payout of the Company's Core Net Income.

Debt Management

As at end December 2014, the Parent Company's outstanding debt from local banks stood at P4.308 billion, of which about P500 million has been retired in January and February this year.

Outlook

The Silangan Project in Surigao del Norte continued to progress as planned with the completion of the project's Definitive Feasibility Study expected to be finalized within the year.

"Against a backdrop of lower metal prices, it was important for the Company to reduce the cost base and considerable progress has been made in this area. While the business environment remains challenging, with lower metal prices and restrictive legislative measures being contemplated especially the proposed new tax laws on the industry, we remain committed to creating value for our shareholders, business partners and employees," Philex Mining President and Chief Executive Officer Eulalio B Austin, Jr said.

************************************** For further information, please contact:

Danny Y. Yu

Chief Financial Officer

Telephone: 631-1381 loc 289

Email: dyyu@philexmining.com.ph

Rolli S. Bondoy

Investor Relations

Telephone: 631-1381 loc 533

Email: rsbondoy@philexmining.com.ph

PHILEX MINING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Amounts in Thousands, Except Par Value Per Share)

ASSETS Current Assets December 31


2014 2013
Cash and cash equivalents P=5,231,892 P=4,080,512
Accounts receivable 1,055,864 295,451
Inventories 1,858,220 2,668,274
Derivative assets 7,766 -

Other current assets 1,376,741 1,343,245

Total Current Assets 9,530,483 8,387,482 Noncurrent Assets

Property, plant and equipment 7,138,912 6,880,096
Available-for-sale (AFS) financial assets 906,681 975,380
Goodwill 1,238,583 1,238,583
Deferred income tax assets - net 8,224 11,818
Deferred exploration costs and other noncurrent

assets 25,817,465 22,427,186

Total Noncurrent Assets 35,109,865 31,533,063 TOTAL ASSETS P=44,640,348 P=39,920,545 LIABILITIES AND EQUITY Current Liabilities

Loans payable P=4,307,720 P=6,176,369
Accounts payable and accrued liabilities 1,795,755 2,321,301
Income tax payable 47,423 11,519
Dividends payable 488,818 460,650

Provisions and subscriptions payable 883,102 805,108

Total Current Liabilities 7,522,818 9,774,947 Noncurrent Liabilities

Deferred income tax liabilities - net 3,859,141 3,946,941
Loans and bonds payable 5,947,366 55,014
Pension obligation 43,585 21,598

Provision for losses and mine rehabilitation costs 225,618 204,791

Total Noncurrent Liabilities 10,075,710 4,228,344 Total Liabilities 17,598,528 14,003,291 Equity Attributable to Equity Holders of the Parent Company

Capital stock - P=1 par value 4,940,399 4,936,996
Additional paid-in capital 1,117,627 1,058,497
Retained earnings
Unappropriated 4,712,032 4,128,826
Appropriated 10,000,000 10,000,000
Net unrealized gain (loss) on AFS financial assets (64,010) 4,689
Equity conversion option 1,225,518 -
Cumulative translation adjustments 37,370 25,116
Net revaluation surplus 1,611,397 1,611,397

Effect of transactions with non-controlling interests 19,084 45,099

23,599,417 21,810,620 Non-controlling interests 3,442,403 4,106,634 Total Equity 27,041,820 25,917,254 TOTAL LIABILITIES AND EQUITY P=44,640,348 P=39,920,545 PHILEX MINING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME

(Amounts in Thousands, Except Earnings per Share)

REVENUE Years Ended December 31 2014 2013 2012

Gold P=5,889,107 P=5,581,587 P=4,946,041
Copper 4,615,092 4,579,757 3,865,704

Silver 78,161 82,063 79,571

10,582,360 10,243,407 8,891,316


Less marketing charges 849,837 659,536 439,771

9,732,523 9,583,871 8,451,545

Petroleum 308,255 191,243 191,003

Others 7,462 27,142 55,041

10,048,240 9,802,256 8,697,589 COSTS AND EXPENSES

Mining and milling costs (including depletion
and depreciation) 6,719,928 5,457,881 3,473,183
General and administrative expenses 943,001 1,311,059 1,148,291
Excise taxes and royalties 507,188 536,522 454,858
Petroleum production costs 152,982 87,895 98,245
Handling, hauling and storage 88,417 69,003 59,339

Cost of coal sales 3,282 17,770 35,238

8,414,798 7,480,130 5,269,154 OTHER INCOME (CHARGES)

Gain on sale of property plant and equipment 764,685 - -
Interest income 16,952 26,060 58,201
Foreign exchange losses - net (56,374) (173,972) (164,716 ) Interest expense (354,461) (416,360) (44,355 )
Reorganization costs (394,154) - -
Impairment loss on deferred exploration

costs and others (569,926) (297,585) (1,023,376) Others - net 14,118 (385,217) (2,017,439) (579,160) (1,247,074) (3,191,685)

INCOME BEFORE INCOME TAX 1,054,282 1,075,052 236,750 PROVISION FOR (BENEFIT FROM) INCOME TAX

Current 421,584 255,703 551,979

Deferred (70,147) 506,954 (4,390)

351,437 762,657 547,589 NET INCOME (LOSS) P=702,845 P=312,395 (P=310,839) Net Income (Loss) Attributable to:

Equity holders of the Parent Company ₱1,005,552 P=341,932 P=208,733

Non-controlling interests (302,707) (29,537) (519,572)

P=702,845 P=312,395 (P=310,839) Basic Earnings Per Share P=0.204 P=0.069 P=0.042 Diluted Earnings Per Share P=0.204 P=0.069 P=0.042


Core Net Income ₱1,121,793 ₱1,081,146* ₱1,689,281 Core Net Income Per Share ₱0.227 ₱0.219* ₱0.342

*Excludes insurance gain from business interruption of P427 million

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