Hochschild Mining H1 Pre-tax Profit Down, Posts Net Loss; Sees Rebound In Profitability In H2

Hochschild Mining (HOC.L) reported Wednesday that its first-half profit before tax was $6.5 million, down from last year’s $29.5 million.

On a continuing operations basis, the company recorded a loss of $9 million, compared to profit of $16.66 million last year. Basic loss per share was $0.02, compared to prior year’s profit of $0.03.

Adjusted profit before income tax was $13.1 million, compared to prior year’s $41.5 million. Adjusted loss per share was $0.01, compared to profit of $0.04 a year ago.

Adjusted EBITDA fell 48 percent to $80.6 million from last year’s $153.7 million.

Revenue fell 35 percent to $232.0 million from $354.5 million last year.

The decline in revenues was due to the effects of the production stoppages in the second quarter resulting from the Covid-19 crisis. This was partially offset by a strong rise in the average realised gold price.

Attributable silver production declined 53 percent and attributable gold production declined 43 percent.

The company recorded a 28 percent rise in the average gold price and an 8 percent rise in the silver price.

Looking ahead, the company said, “Gold has recorded an all-time high recently and silver has reached its highest price level in seven years and we are therefore hopeful of delivering a strong rebound in profitability in the second half of the year provided our people are able to operate safely and experience less disruption. We intend to provide updated guidance when we have assessed the full impact of the suspensions.”

Further, the company said its Board has concluded that it would be inappropriate to pay a distribution to shareholders at this time.

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