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SEC filingHudbay Minerals delivered record revenue and adjusted EBITDA in 2024, driven by higher metal prices and record gold production, while significantly reducing net debt.
Hudbay Minerals Inc. delivered a strong financial performance in 2024, achieving record revenue of $2,021.2 million, a 20% increase from $1,690.0 million in 2023. The growth was driven by higher realized prices for copper and gold, along with record gold production of 332,240 ounces (up 7% year-over-year). Gross profit rose 41% to $553.8 million, reflecting margin expansion as cost increases were outpaced by revenue gains. Operating income increased 35% to $400.3 million, while net income attributable to owners grew 15% to $76.7 million. Earnings per share (EPS) declined from $0.22 to $0.20 due to dilution from the May 2024 equity offering, despite higher net income.
Key drivers of revenue growth were higher gold prices (average realized $2,241/oz vs. $1,898/oz) and copper prices ($4.18/lb vs. $3.84/lb), partially offset by lower copper sales volumes in Peru due to timing of concentrate shipments. Gold sales volumes surged 21% to 335,342 ounces, largely from Manitoba's Lalor mine producing a record 214,225 ounces of gold. British Columbia contributed incremental revenue of $274 million for a full year of ownership versus a partial year in 2023.
Hudbay significantly strengthened its balance sheet in 2024. Cash and cash equivalents increased to $541.8 million from $249.8 million, aided by net proceeds of $386 million from an equity offering and strong operating cash flows. Total liquidity (cash plus undrawn credit facilities) reached $1,007.8 million. Long-term debt was reduced by $180 million to $1,107.5 million through the repurchase of $82.6 million of senior notes and repayment of $100 million in revolving credit borrowings.
Net debt (total debt minus cash and short-term investments) plummeted 49% to $525.7 million, reflecting a net reduction of $512 million. The net debt to adjusted EBITDA ratio improved from 1.6x to 0.6x, well below the 1.2x target for sanctioning Copper World. The company also extended its revolving credit facilities by three years, providing flexibility to keep its 2026 notes outstanding to maturity.
Cash generated from operating activities was $666.2 million, up 40% from $476.9 million in 2023, driven by higher earnings and working capital changes. Operating cash flow before changes in non-cash working capital reached a record $691.1 million, an increase of $121 million year-over-year. Free cash flow (CFO minus capex) was approximately $319 million, enabling substantial debt reduction and balance sheet improvement.
Capital expenditures totaled $347.1 million, mainly for sustaining activities and stripping programs. Growth capital was focused on British Columbia mill improvements ($75 million) and Copper World feasibility studies ($90 million). The gold prepayment liability was fully repaid by August 2024, further improving cash flow.
Dividends of $5.5 million were paid, consistent with prior years. No share buybacks were conducted. The company prioritized deleveraging and investing in high-return brownfield projects.
Management highlighted several strategic achievements in 2024:
For 2025, Hudbay guided for stable copper production of 133,000 tonnes (midpoint) and lower gold production of 277,750 ounces, reflecting the planned depletion of the Pampacancha satellite deposit. Consolidated cash cost is expected to rise to $0.80-$1.00 per pound due to lower by-product credits and higher sustaining capital of $365 million. Growth capital of $205 million includes $55 million for Copper Mountain mill debottlenecking and $65 million for Copper World feasibility work.
Key risks include political and community relations challenges in Peru, permitting appeals for Copper World, and operational ramp-up risks at Copper Mountain. However, the improved balance sheet provides resilience. Exploration drilling in Snow Lake and Peru's Maria Reyna/Caballito properties offers upside optionality.
On an adjusted basis (removing non-cash items like PP&E write-downs, FX losses, and mark-to-market adjustments), adjusted net earnings attributable to owners were $181.4 million or $0.48 per share, compared to $69 million ($0.23 per share) in 2023. The effective tax rate was 73% due to mining taxes and foreign exchange impacts.
By segment, Manitoba delivered the strongest operating margin of 34.7% thanks to record gold production and low cash costs of $606/oz. Peru's operating margin was 21.9% despite higher grades in Q4. British Columbia remained in a loss position as the operation undergoes stabilization; 2025 expectations include positive cash flow as mill throughput ramps up.
Hudbay ended the year with $69.2 million of goodwill, entirely related to the British Columbia CGU, which passed its annual impairment test. The company had $542 million in senior notes due 2029 and $575 million due 2026 outstanding, with no undrawn credit facility capacity of $426 million.