Centamin posts record production, but profits hit by falling prices

14th Aug 2013 07:44

Centamin, the FTSE 250 north-east Africa-focused gold miner, delivered record production in the second quarter and maintained its full-year guidance, but said that earnings fell from the start of the year.The company, whose flagship Sukari mine is located in Egypt, said production reached a record 93,624 ounces in the three months ended June 30th, representing 7.6% growth quarter-on-quarter (q/q) and a 38.9% increase year-on-year (y/y).However, EBITDA totalled just $63.7m during the second quarter, down 22% q/q as the average sales price of gold slumped from $1,604 to $1,364 an ounce. Prices also fell from $1,599 an ounce in the second quarter of 2012 but a reduction in cash costs helped EBITDA still rise 15% y/y.Revenue amounted to $134.3m, down from $138.2m in the first quarter but up from $96.8m on last year.Chairman Josef El-Raghy said: "The second quarter saw continued improvements in mining and processing productivity at the Sukari operation which, combined with average grades in line with the mine plan, delivered a third successive quarter of record output. "With commissioning activities likely to see reduced throughput in Q4 and the benefit of additional Stage 4 throughput to be seen in 2014 our full-year guidance of 320,000 ounces remains unchanged." This target is over 20% higher than in 2012.The commissioning of the Stage 4 plant expansion will help drive the miner's next phase of growth towards its long-term output target of 450,000-500,000 ounces per annum from 2015.As for the environment in Egypt, Centamin said that the recent political changes in the country have not affected operations at Sukari."The company remains confident that Egypt's ongoing political transition will not have a material adverse impact on the company's investment and there are no matters to report outside of what is already publicly available."BC