Central Asia Metals lowers dividend after weaker first half

Central Asia Metals (CAML) declared a dividend of 9p per share for its first half on Wednesday, down from 10p in the same period last year.

The AIM-traded firm said its gross revenue for the six months ended 30 June totalled $99.3m - a decline from $119.5m a year earlier.

Net revenue similarly stood at $93.6m, compared to $113.8m in the first six months of 2022.

EBITDA amounted to $48.9m, down from $74.9m, while its EBITDA margin slid to 49% from 63%.

Adjusted free cash flow was reported at $24.1m, a considerable drop from $52.2m year-on-year.

On the operational front, CAML said that at Kounrad, there was a slight increase in copper production with 6,716 tonnes produced, compared to 6,617 tonnes a year earlier.

However, sales saw a marginal drop to 6,315 tonnes, down from 6,406 tonnes in the previous year.

The Sasa facility reported zinc concentrate production of 9,764 tonnes and sales of 8,382 tonnes.

Both figures were slightly lower than the first half of 2022’s production and sales, which stood at 10,465 tonnes and 8,761 tonnes, respectively.

Lead concentrate production at Sasa was 13,734 tonnes, with sales amounting to 12,416 tonnes.

That too marked a slight decline from the prior figures of 13,827 tonnes and 13,608 tonnes, respectively.

The company reported one lost time injury, and a lost time injury frequency rate of 0.8, which was a slight improvement from 0.85 a year earlier.

CAML confirmed its debt-free status, and said that as at 30 June, it had a robust cash position of $50.6m in the bank.

That did, however, reflect a decrease from the $60.6m it held on 31 December.

Looking ahead, CAML said it remained on track to achieve its copper production guidance of 13,000 to 14,000 tonnes, zinc concentrate production between 19,000 and 21,000 tonnes, and lead concentrate production of 27,000 to 29,000 tonnes.

The company said it was planning to complete the construction of the Kounrad solar power plant, while the Sasa facility would begin its transition to paste fill mining methods.

“The first half of 2023 was a successful period for our investments at both sites, with the solar power plant advancing and commissioning of the paste backfill plant using thickened tailings now underway,” said chief executive officer Nigel Robinson.

“The transition to paste fill mining remains on track to commence in the second half.

“We also witnessed the connection of the Central Decline at Sasa, which was developed both from surface and the 910 metre level, and this is now operational.”

Robinson said construction of the dry stack tailings plant project was also underway.

“We have continued to develop our approach to sustainability, and in the first half, we published our fourth standalone sustainability report covering our 2022 activities.

“We also published our second climate change report, and have commenced work to estimate our Scope 3 emissions with a view to reporting them in 2024.”

As the firm approached the end of 2023, Nigel Robinson said it was confident that it would deliver on its production guidance for its three base metals, while transitioning to paste fill mining methods at Sasa.

“We will continue to focus on maintaining our competitive cost base and look for opportunities to grow the business.”

At 1028 BST, shares in Central Asia Metals were down 1.46% at 203p.

Reporting by Josh White for Sharecast.com.