As expected, gold miner Centamin (CEY) declared a maiden dividend with these half-year figures. It has therefore joined that small group of London-listed gold miners that actually return cash to shareholders. But this good news was tempered by a sharp fall in revenues and earnings, while gross profit slumped over two-thirds to $44.8m (£26.8m).
Centamin has been mining lower-grade ore at its sole producing Sukari mine in Egypt. Accordingly, unit cash costs jumped year-on-year, with an average rate of $783/oz logged during the second quarter against $690/oz for the same period in 2013. A 12 per cent drop in realised gold prices to $1,294/oz didn't help, either.
Still, the issue of ore grades is likely to be temporary as recent upgrades to mine infrastructure are expected to bolster average grades over coming months. Production rose, too, and Centamin produced 81,281 ounces in the second quarter - 9 per cent higher than in the first - but still 13 per cent down on the same period last year. However, the miner is sticking with its full-year target of 420,000 ounces at a cash cost of $700/oz.
Broker Numis Securities expects full-year EPS of 11¢ (17¢ in 2013), rising to 14¢ next year.
| CENTAMIN (CEY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 64.65p | MARKET VALUE: | £745m | |
| TOUCH: | 64.5-65p | 12-MONTH HIGH: | 76p | LOW: 35p |
| DIVIDEND YIELD: | 0.87% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 112¢ | NET CASH: | $107m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2013 | 272 | 124 | 11.3 | nil |
| 2014 | 205 | 32 | 2.8 | 0.87 |
| % change | -25 | -74 | -75 | - |
Ex-div: 3 Sep Payment: 3 Oct £1=$1.67 | ||||
