Centamin confident on outlook, raises interim dividend

Investors reacted positively as Centamin posted a sharp drop in first half profits , but raised its dividend payout and sounded a confident note on the outlook for the back half of 2019, standing by its guidance for full-year output and costs and raising its dividend.

The gold miner's net revenues slipped by roughly 3.0% versus a year ago and unit cash costs increased by 9.0% to $692 per ounce, resulting in a 10% drop in earnings before interest, taxes, depreciation and amortisation to £117.1m.

The amount of gold sold during the period also slipped, by approximately 2.0% to 224,129 ounces, which were sold at an average price of $1,305/oz..

All-in sustaining costs meanwhile came in at $940.0/oz., which was towards the top end of its previously guidance range for between $890-950.0/oz..

Group sustaining, development and growth capital and exploration expenditure hit $58.4m, in line with its annual guidance, the company said in a statement.

In parallel, adjusted fee cash flow, taking into account the outfit's profit sharing agreement in place with the Egyptian state, fell by 1.0% over the latest six-month stretch to reach $35.71m.

Regarding its outlook, management continued to anticipate full-year 2019 gold production of 490,000-520,000/oz. with AISC of $890-950 per ounce sold.

Production and free cash flow were both seen rising in the back half of the year "predominantly driven by improved grades from the open pit" and with costs trending downwards on the back of higher production volumes.

For 2020 and 2021, Centamin's baseline outlook was for production of 510,000-540,000 each year, at an AISC of US$870-920 per ounce sold.

That outlook excluded any upside from plant and open pit optimisation, underground grade improvement, Cleopatra stoping, and regional exploration, Centamin said.

As at 30 June, and following the payout of the final 2018 dividend, the company had no debt, no hedging and cash and liquid assets stood at $326.6m.

The board declared an enhanced interim dividend of $46.2m or four US cents per share, for a total $500.0m in distributions to shareholders since 2014.

As of 1411 BST, shares of Centamin were 6.44% higher to 129.8p.