Silver Wheaton Corp., the second largest silver company in the world, posted strong second-quarter earnings Monday on greater production and higher prices.
Net income for the three months ended June 30 soared to $148.1 million, or 42 cents per share, from $15.3 million, or 4 cents per share. Revenue more than doubled, to $194.8 million from $95 million.
Chief Executive Randy Smallwood attributed the strong results to his company's low, fixed costs, which averaged about $4.10 per ounce during the quarter, and the period's average silver price of $38.38 per ounce.
"The difference between those two numbers is all free cash flow for us," he said.
Silver Wheaton posted a record operating cash flow of $168.3 million, or 48 cents per share, compared with $67 million, or 20 cents per share, in the second quarter of last year.
The company, which has major operations in Latin America, has now had five consecutive quarters of increasing operating cash flows, said Smallwood, who expressed optimism about the price of silver over the next several years.
He said he wouldn't be surprised to see silver rise to $50 per ounce by the end of this year, "though it might not stay in that range," and in three to four years reach $100 per ounce. The size of the increase will depend mainly on the lack of confidence in the U.S. dollar, a trend that makes silver increasingly attractive to investors, Smallwood said.
"With silver production rates forecast to grow by 80 percent over the next five years, and ongoing global economic and political uncertainties supporting robust silver prices, our shareholders should continue benefiting from strong free cash flow generation in the years ahead," he said.
Total liabilities during the period fell to $360 million from $613.1 million, while total assets rose to $2.8 billion from $2.38 billion.
Silver Wheaton also maintained its long-term 2015 attributable production guidance at about 43 million silver equivalent ounces.
Shares of the Vancouver-based company slid in afternoon trading $1.12, or 3.28 percent, to $33.03, about the middle of its 52-week range. The decline was less than that of the broader S&P 500 index, which plunged more than 5 percent.