Centamin watching costs after 'strong' first half
By Josh White
Date: Thursday 04 Aug 2022
(Sharecast News) - Centamin reported first half revenue of $382m in its interim report on Thursday, up 4% year-on-year, from gold sales of 203,587 ounces at an average realised gold price of $1,872 per ounce.
The FTSE 250 company said its cash cost of production in the six months ended 30 June was $931 per ounce produced, up 15%, and its all-in sustaining costs were $1,446 per ounce sold, 22% higher than the same period last year.
EBITDA fell 19% to $153m, with a 40% EBITDA margin, while net profit after tax attributable to shareholders up 42% to $85m, for a 42% improvement in basic earnings per share to 7.35 US cents.
Capital expenditure in the period rose 77% to $139m, including $6m of non-cash IFRS 16 additions.
Centamin said it made "good progress" on key capital projects such as the solar plant, paste-fill plant and stages two and three of the second tailings storage facility.
It declared an interim dividend of 2.5 cents per share, equating to a distribution of $29m, to be paid to shareholders on 7 October.
Group operating cash flow narrowed 9% to $128m, while group free cash flow tumbled 255% to -$25m.
The board put that down to its investments in operations, with $133m cash invested in capital expenditure, as well as $33m of profit share and royalty distributions to its partner EMRA.
Centamin described a "strong and flexible" balance sheet, with available cash and liquid assets of $175m as at 30 June and after payment of the 2021 final dividend of $58m on 15 June.
Looking ahead, Centamin reaffirmed its production and cost guidance for 2022, with gold production of between 430,000 and 460,000 ounces for the year.
Cash costs were set to be between $900 and $1,000 per ounce produced, and all-in sustaining costs were expected to be $1,275 to $1,425 per ounce sold.
Given the current inflationary operating environment, Centamin said it was monitoring consumables pricing and reviewing opportunities to offset price increases with cost savings initiatives such as the solar power plant.
It said it expected cash costs and all-in sustaining costs for 2022 to be at the "upper end" of the guidance range, however.
The company's capital expenditure budget for the year remained at $225.5m, and its exploration expenditure was expected to total $25m.
"Centamin has delivered strong performance against guidance and its long-term plans during the first half of the year," said chief executive officer Martin Horgan.
"We are now starting to see the benefit of the reinvestment programme as the revised mine plan delivered improved production and costs during the second quarter of 2022.
"The waste stripping programme has enabled re-entry into the higher grade areas of the open pit while the transition to owner operations in the underground resulted in much improved productivity during the second quarter."
Horgan said the new solar power plant was expected to yield cost and decarbonisation benefits through the second half.
"Alongside this emerging growth, we remain committed to delivering shareholder returns and today announce an interim dividend of 2.5 cents per share."
At 1010 BST, shares in Centamin were up 3.81% at 87.55p.
Reporting by Josh White at Sharecast.com.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN