Hochschild lowers guidance after weaker first half

Hochschild Mining reported a fall in a number of key financial metrics in its interim results on Wednesday, as it lowered its full-year production outlook.

The London-listed company reported revenue of $314m for the first half, down from $347.8m during the same period in the prior year.

Adjusted EBITDA came in at $99.5m for the six months ended 30 June, compared to $130.5m for the first half of 2022.

Pre-exceptional profit before income tax stood at $0.8m, a sharp decline from $15.3m year-on-year, while it made a post-exceptional loss before income tax of $66.1m, swinging from a profit of $5.4m a year earlier.

Basic losses per share were reported at nine cents post-exceptional and 0.4 cents pre-exceptional, compared to earnings per share of one cent in the first six months of 2022.

Cash and cash equivalents decreased to $93.6m as of 30 June, compared to $143.8m at the end of December.

Meanwhile, net debt widened to $227.1m from $175.1m over the same period.

On the operational front, Hochschild’s Modified Environmental Impact Assessment for its Inmaculada operation was approved on 1 August, extending the project's lifespan for an additional 20 years.

However, the all-in sustaining cost (AISC) rose from $1,466 per gold equivalent ounce in the first half of 2022, to $1,572 this year.

Production figures also declined, with attributable production being 136,878 gold equivalent ounces or 11.4 million silver equivalent ounces for the period, compared to 157,380 gold equivalent ounces or 13.1 million silver equivalent ounces a year ago.

Looking ahead, Hochschild Mining adjusted its full-year outlook for 2023, citing delays in the Modified Environmental Impact Assessment (MEIA) at Inmaculada and increased development costs at its San Jose mine.

The company said it was now aiming for a revised production target of between 289,000 and 303,000 gold equivalent ounces, down from prior estimates.

Its AISC target was also revised to between $1,490 and $1,580 per gold equivalent ounce.

Capital expenditure for sustaining and development was expected to range between $130m and $140m for the full year.

Additionally, Hochschild drew down an extra $60m in early August from a $200m debt facility it signed in December last year.

At 0849 BST, shares in Hochschild Mining were down 2.05% at 83.55p.

Reporting by Josh White for Sharecast.com.