UPDATE 2-Grupo Mexico Q4 profit up; China copper demand improves

Fri Feb 1, 2013 2:31am GMT

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* Q4 net profit up 15 percent to $716.6 million

* Q4 sales flat at $2.5 billion

* China demand for copper slowly improving

By Gabriel Stargardter

MEXICO CITY, Jan 31 (Reuters) - Mexican copper miner and railroad operator Grupo Mexico said fourth-quarter net profit climbed 15 percent, helped by a more favourable exchange rate and improving copper prices on stronger demand from China

Grupo Mexico, which plans to increase investment by 65 percent this year, posted record production of 826,209 tons of copper content in 2012, despite a 10 percent drop in copper prices. It owns the Buenavista mine in northern Mexico, which has the world's largest copper reserves.

"Little by little Chinese demand is recovering," the company said in a filing to the Mexican stock exchange on Thursday, adding that it expected copper prices to remain at or above current levels, supported by solid industry fundamentals.

Net profit for the October-December period came in at $716.6 million while revenues were flat at $2.5 billion. The company also said it had increased productivity and made cost savings at its mining and transportation divisions over the year.

Average gold prices peaked in the fourth quarter at $1,718.89/ounce, the company said, adding that for 2012 gold production rose 22 percent.

Earnings before income, taxes, depreciation and amortization (EBITDA) totaled $1.2 billion for the quarter, down 2.9 percent on the same period last year.

Grupo Mexico also said it has approved a 0.26 peso ($0.02) dividend for each share in circulation, which will be paid after Feb. 28.

The company plans to invest $3.5 billion in 2013, $2 billion in its mining division, $1 billion in its infrastructure division and $500 million in its transport division.

Prior to the results, which came after the close of trade, its shares traded 1.1 percent lower at 47.38 pesos on the Mexican stock exchange.

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