Alongside a net profit of $75m across the first six months of 2020, Centamin confirmed an increased interim dividend on its shares
Centamin profits were up in the first half of 2020 following strong gold prices and an increase in production from its flagship Sukari mine in Egypt.
In a statement, the London-listed miner announced its revenue from the start of the year to June 30 was $449m from gold sales of 270,529 ounces at an average realised gold price of $1,657 per ounce.
Alongside a net profit of $75m across the first six months of 2020, Centamin confirmed an increased interim dividend on its shares.
This marks a huge shift in fortunes for the company, after a drop in output at Sukari in recent years had led to reported unrest amongst its investors.
Following takeover interest from Canada-based Endeavour Mining in December 2019, Centamin agreed to discuss a potential deal – but an agreement could not be reached and now production appears to be back on the up at its Egyptian gold mine.
‘Strong operating and financial performance’ for Centamin, says CEO
Centamin CEO Martin Horgan said that, over the first half of this year, the company has “successfully navigated the challenges presented by the Covid-19 pandemic” to deliver a “strong operating and financial performance”.
“This operational delivery has enabled us to benefit from the recent strength in the gold price,” he added.
“Combined with our disciplined cost management and unhedged, debt-free balance sheet, Centamin has generated meaningful free cash flow leading to a 50% increase in the interim dividend to 6 US cents per share.”
Horgan said this would not be possible if it wasn’t for the “remarkable efforts” of the firm’s workforce and thanked the Egyptian government for its support in “ensuring Sukari is operated safely and responsibly”.
“So far, 2020 has seen both changes at the board and management level that will seek to build on the previous success of the company as we look to shape the plans for the next 10 years,” he added.
Centamin profits for the first half of 2020
Centamin’s adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) was $255m, a 57% EBITDA margin, while its profit before tax was $191m – up from $59.6m a year ago.
The miner’s free cash flow generated stood at $102m, after $114m was distributed in profit share and royalties to the Egyptian state.
Its operations, supply chain and gold shipments have “not been materially impacted” by Covid-19, with related costs incurred due to the pandemic standing at $5.7m.
Centamin’s all-in sustaining costs (AISC) up until June were $899 per ounce sold, which was within the annual guidance range of $870 to $920 per ounce. Its capital expenditure was below budget at $52m.
The miner said it “remains on track” to meet its 2020 full-year production guidance of between 510,000–525,000 ounces of gold, as well as the cost guidance of between $630 and $680 per ounce produced in cash costs, and $870 and 920 per ounce sold in AISC.
Horgan confirmed a life of asset review for the Sukari Mine, which is regarded as one of the world’s largest gold deposits, is underway and is on track to be released in the second half of this year.