Hochschild earnings fall as first-half production slows

Hochschild Mining reported first-half revenue of $347.8m on Wednesday, down from $394.8m year-on-year, as adjusted EBITDA fell to $130.5m from $198.5m.

The London-listed firm said its pre-exceptional profit before tax totalled $15.3m for the six months ended 30 June, down from $97.8m, while basic earnings per share slid to one cent from eight cents.

It swung to a basic post-exceptional loss per share of one cent, from earnings of seven cents a year ago.

Cash and cash equivalents totalled $204.3m on 30 June, down from $386.8m at the end of December, following completion of the Amarillo acquisition on 1 April.

Net debt stood at $109.3m at period end, swinging from net cash of $86.3m on 31 December.

The board declared an interim dividend of 1.95 cents per share, totalling $10m, in line with the distribution it made at the same time last year.

Operationally, Hochschild said its all-in sustaining costs from operations were $1,371 per gold equivalent ounce in the period, up from $1,055 year-on-year and in line with guidance.

Attributable production totalled 166,708 gold equivalent ounces or 12 million silver equivalent ounces in the period, down from 188,509 gold equivalent ounces and 13.6 million silver equivalent ounces a year ago.

Hochachild said it was on track to deliver its overall 2022 production target of 360,000 to 375,000 gold equivalent ounces, or 26 million to 27 million silver equivalent ounces.

It was also on track to meet guidance for all-in sustaining costs of $1,330 to $1,370 per gold equivalent ounce, or $18.50 to $19 per silver equivalent ounce.

“Political, social and economic risks in Latin America as a whole remain elevated - consequently, we are closely monitoring any new legislative, regulatory and local initiatives which could impact our exploration and operational activities,” said chief executive officer Ignacio Bustamante.

“Nonetheless, we look forward to the second half which will feature further investment in our exciting Mara Rosa project as well as a pre-feasibility study at the Snip project.

“In addition, in Peru we can expect the completion of the modified environmental impact study for Inmaculada and further brownfield exploration at Pallancata which aims to secure the medium-term future of the mine whilst we assess the short-term geological viability of the current mining area.”

At 0948 BST, shares in Hochschild Mining were down 4.92% at 77.39p.

Reporting by Josh White at Sharecast.com.