Shares in Centamin (CEY) have been flying of late, but the stock has further to go on the back of this impressive set of 2016 interim results. The Egypt-focused gold miner edged up 3 per cent after it revealed a second-quarter increase in production to 140,000oz, 12 per cent ahead of the first three months of the year, and 30 per cent up on 2015. Even more impressive was the second-quarter drop in all sustaining costs to $669 (£511) and an average realised gold price at $1,268 an ounce.
Now, confident it can keep a lid on costs and continue to benefit from favourable fuel prices, management saw fit to boost maximum guidance for 2016 from 470,000 to 540,000 ounces. If Centamin hits the upper end of forecasts, and the gold price holds at or above $1,250, there's every chance that the net cash position will be bolstered beyond the 41 per cent gain seen since the end of December. Disappointingly, there was no resolution to the legal battle over the Sukari mine which we flagged in March, and the company has warned the process could be lengthy.
Bloomberg consensus forecasts are for $185m pre-tax profits and adjusted EPS of 15.9¢ this year, up from $105m and 7.8¢ in the 12 months to December 2015.
CENTAMIN (CEY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 177p | MARKET VALUE: | £2.04bn | |
| TOUCH: | 176.8-177.4p | 12-MONTH HIGH: | 183p | LOW: 53p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 125¢ | NET CASH: | $282m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 260 | 47.4 | 4.15 | 0.97 |
| 2016 | 328 | 114 | 9.84 | 2.00 |
| % change | +26 | +141 | +137 | +106 |
Ex-div: 8 Sep Payment: 7 Oct £1=$1.31 | ||||
