EPS of $-0.05 increased by 8.9% from previous year
Gross margin of 18.2%
Net income of -16.58M
"N/A" - N/A
Hudbay Minerals Inc (0AHJ.L) QQ2 2024 Financial Analysis and Investment Outlook
Executive Summary
Hudbay Minerals reported QQ2 2024 revenue of $425.5 million, up 36.3% year over year, but QoQ revenue declined 18.95% as quarterly momentum moderated. EBITDA reached $122.3 million and operating income was $33.4 million, yet the company posted a net loss of $16.6 million driven by substantial depreciation and amortization ($100.6 million) and a notable negative swing in total other income/expenses (-$44.3 million). The quarter generated solid operating cash flow of $103.9 million and free cash flow of $14.6 million, supporting a cash balance of about $483.8 million. Hudbay’s balance sheet shows total assets of $5.44 billion and total liabilities of $2.86 billion, with net debt of $0.76 billion and a debt-to-capitalization ratio of roughly 0.34, indicating moderate leverage against a backdrop of strong asset coverage but a heavy depreciation burden that compresses reported profitability.
Near term, results reflect sensitivity to commodity pricing, production volumes, and capex intensity. Management did not issue explicit QQ2 forward guidance in the provided materials; however, the company continues capital investment on its polymetallic asset base, which should support longer-term cash generation if commodity prices stabilize or improve. Investors should monitor copper and zinc price cycles, mine throughput, capex execution, and debt reduction momentum as key variables governing Hudbay’s earnings trajectory and liquidity profile.
Cash flow and liquidity:
- Net cash provided by operating activities: $103.92 million.
- Capital expenditures: $(89.30) million.
- Free cash flow: $14.62 million.
- Cash and cash equivalents: $483.77 million; total cash plus short-term investments: $523.77 million.
Balance sheet and leverage:
- Total assets: $5.442 billion; total liabilities: $2.860 billion; total equity: $2.482 billion.
- Total debt: $1.241 billion; net debt: $0.758 billion.
- Current ratio: 1.87; quick ratio: 1.49; cash ratio: 0.99.
- Debt-to-capitalization: 0.339; Debt-to-equity: 0.513; long-term debt to capitalization: 0.322.
Valuation and efficiency:
- Price-to-book: 1.28x; price-to-sales: 7.44x; price-to-earnings: negative; EBITDA multiple not provided in the data.
- Asset turnover: ~0.078x (operating assets to sales); fixed asset turnover: ~0.10x. Cash flow leverage metrics indicate a sizable net debt load relative to EBITDA (~6.2x).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
425.52M
36.31%
-18.95%
Gross Profit
77.63M
239.09%
-48.93%
Operating Income
33.39M
14 743.86%
-66.89%
Net Income
-16.58M
-11.06%
-174.17%
EPS
-0.05
8.93%
-183.33%
Key Financial Ratios
currentRatio
1.87
grossProfitMargin
41.2%
operatingProfitMargin
10.5%
netProfitMargin
-3.9%
returnOnAssets
-0.31%
returnOnEquity
-0.67%
debtEquityRatio
0.51
operatingCashFlowPerShare
$0.42
freeCashFlowPerShare
$0.15
priceToBookRatio
1.28
priceEarningsRatio
-47.7
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript insights unavailable for QQ2 2024: no earnings call transcripts were provided in the data set. Consequently, there are no management quotes to group by themes (strategy, operations, market conditions). If transcripts become available, we would extract 2 key quotes with attribution and summarize their significance.
N/A
— N/A
N/A
— N/A
Forward Guidance
No formal forward guidance was disclosed in the QQ2 2024 materials. Given Hudbay’s asset base and ongoing capital program, the trajectory will hinge on: (1) copper/gold/zinc price cycles and realized grades/throughput, (2) capex execution and timing of major project milestones, and (3) the company’s ability to improve operating leverage and deleverage balance sheet. Investors should monitor commodity price trends, unit production costs, and debt reduction progress, as these will be primary drivers of earnings power and FCF generation in the next 4–12 quarters.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0AHJ.L Focus
18.24%
10.50%
-0.67%
-47.70%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, Hudbay presents a cautious to neutral investment profile for QQ2 2024. The quarter shows robust revenue growth and meaningful EBITDA, but profitability is constrained by high non-cash depreciation and an outsize net debt burden relative to current earnings. The company demonstrates solid cash generation from operations and a healthy liquidity cushion, suggesting capacity to fund ongoing capex and service debt if commodity markets stabilize. Absent a clear guidance signal, the investment thesis hinges on commodity price trajectories, execution of capex programs, and strengthening deleveraging. A potential upside exists if copper prices strengthen and production scales up with improved operating efficiency; downside risk is elevated if prices decline or if capex delays erode projected cash flows. For investors with a medium-term horizon, Hudbay could offer optionality through commodity-cycle exposure, provided the company makes concrete progress on debt reduction and margin expansion. Monitor: (1) commodity price trends for copper/zinc/gold, (2) quarterly production volumes and cost per tonne, (3) progress on capital projects and capex cadence, and (4) debt reduction trajectory and liquidity position.
Key Investment Factors
Growth Potential
Diversified polymetallic asset base with exposure to copper, gold, zinc and silver provides optionality across commodity cycles. Moderate-to-significant capex supports potential future production growth and downside protection through asset breadth. Positive catalysts include copper price strength and successful ramping of core operations, supported by ongoing capital programs that could lift EBITDA and FCF once efficiency gains materialize.
Profitability Risk
Key risks include commodity price volatility, exploration/operational risk at mining sites, significant depreciation burden suppressing reported net income, higher-than-average leverage for a mid-cap miner, and sensitivity to FX and inflation affecting input costs. The negative net income in QQ2 2024 highlights earnings volatility driven by non-cash and non-operating items; sustained cash generation remains critical to funding capex and deleverage.
Financial Position
Solid liquidity with ~$483.8M in cash plus equivalents and ~$523.8M in total cash and short-term investments. However, net debt of ~$0.76B and a net debt/EBITDA around 6.2x signal meaningful leverage given current earnings, which could pressure credit metrics during commodity downturns. The company exhibits a moderate balance sheet risk profile via debt-to-capitalization of ~0.34 and a relatively high asset base cushioning cash flow volatility.
SWOT Analysis
Strengths
Diversified polymetallic asset base with exposure to copper, gold, and zinc across North and South America.
Solid quarterly operating cash flow: $103.9 million in QQ2 2024.
Adequate liquidity with cash and equivalents of ~$483.8 million and a broad asset footprint supporting cash generation.
EBITDA of $122.3 million indicating meaningful operating scale despite a net loss in the quarter.
Experienced operator with established mining and processing capacity across multiple jurisdictions.
Weaknesses
Net income negative for QQ2 2024 (-$16.6 million) due to high depreciation/amortization and other non-operating items.
Significant depreciation and amortization (~$100.6 million) compressing reported margins and earnings.
Relatively high net debt load and leverage (net debt/EBITDA ~6.2x) for a mid-cap miner.