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Penoles Declines Most in Six Weeks as Profit Tumbles With Sales

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Aug. 6 (Bloomberg) -- Industrias Penoles SAB, the second-biggest Mexican mining company by market value, fell the most in six weeks as quarterly revenue and profit dropped.

The shares fell 7.6 percent to 409.42 pesos today, the biggest drop since June 20 on a closing basis. Penoles was the worst performer on the benchmark IPC index of 35 Mexican companies, which was little changed. Fresnillo Plc, the London-traded unit that accounts for most of Penoles’s profits, fell 11 percent today, the most on the FTSE 100.

The precious-metals miner’s net income plummeted 46 percent to 1.2 billion pesos ($95 million) in the second quarter as sales fell to 17.2 billion pesos. Invex Casa de Bolsa SA had projected profit of 2.31 billion pesos. Gold for immediate delivery declined 23 percent in the second quarter, while silver slid 31 percent.

“Sales were affected by the drop in metals prices, as well as the reduction in production volume,” Monex Casa de Bolsa SA analyst Fernando Bolanos said in an e-mailed research note today. He cut his target price to 400 pesos from 465 pesos, while keeping his recommendation at sell.

To contact the reporter on this story: Jonathan Levin in Mexico City at jlevin20@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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