Centamin earnings slide as gold sales fall in first half

Centamin reported first half revenue of $367.4m on Thursday, down 18% year-on-year, from gold sales of 203,802 ounces, down 25%, at an average realised gold price of $1,799 per ounce, up 9%.

The FTSE 250 company said its operations, supply chain and gold shipments were not materially impacted by the Covid-19 pandemic in the six month period ended 30 June, with related pandemic costs totalling $6.5m, within budget.

Its cash cost of production was $807 per ounce produced, up 26% year-on-year, and all-in sustaining costs totalled $1,186 per ounce sold, 32% higher than the prior year.

EBITDA slid 26% to $190.4m, with the company’s EBITDA margin coming in at 52%, while profit before tax dropped 39% to $116.8m, with net profit after tax attributable to shareholders off 20% at $59.5m, for basic earnings per share of 5.16 US cents, 21% lower than the first half of last year.

Capital expenditure was 51% higher at $78.3m, as “good progress” was made on key capital projects including the solar plant, second tailings storage facility, paste-fill plant, workforce accommodation and facility upgrades.

The Centamin board declared an interim dividend of 4.0 cents per share, totalling $46.3m, to be paid to shareholders on 30 September.

Group free cash flow was better than budgeted , falling 84% to $16.2m, after $56.7m was distributed in profit share and royalties to the company’s partner, the government of Egypt.

It described its balance sheet as “strong and flexible”, with available cash and liquid assets of $312.1m as at 30 June, after payment of the 2020 final dividend of $34.5m on 15 June.

“Centamin has delivered a strong performance against plans in the first half of the year, driven by our continued focus on cost control, operating efficiencies and productivity gains,” said chief executive officer Martin Horgan.

“We remain on track to meet full year cost and production guidance and our key capital projects continue to progress on schedule.

“The company is financially robust with $312m in cash and liquid assets, providing the flexibility to invest in the long-term future of our flagship asset, Sukari, and continue to develop our active growth pipeline in Egypt and Côte d'Ivoire.”

At 0947 BST, shares in Centamin were down 2.31% at 103.6p.