20th Aug 2014 07:43
LONDON (Alliance News) - Hochschild Mining PLC Wednesday said its pretax loss narrowed sharply in the first half of the year, after a big impairment the previous year was not repeated and the company reined in costs across the business, although it said revenue was hit by lower metal prices.
The FTSE 250-listed precious metals producer posted a pretax loss of USD3.4 million for the six months to June 30, compared with a USD48.7 million loss in the first half of 2013 when it booked a USD61.9 million net impairment and write-off of non-financial assets, relating to the Azuca project and the San Jose mine unit.
Hochschild said lower production, administration and exploration costs in the first half of this year, also helped narrow its loss.
The company, which has operations in South and Central America, achieved revenue of USD282.0 million in the first-half, compared with USD308.6 million in the first half of 2013.
"The current level of capital expenditure required by the Inmaculada project restricts the potential to pay an interim dividend. We remain committed to the long term principle of delivering shareholder returns, and the board intends to once again reassess the position subject to the overall full-year financial results," said Executive Chairman Eduardo Hochschild in a statement.
Hochschild reduced its level of capital expenditure in the first-half by USD67 million.
The company said its produced 11.9 million silver equivalent ounces in the first-half, at a much lower overall cost, including 8.5 million ounces of silver and 55.5 thousand ounces of gold. While silver production rose and gold production fell, the company said the average price of silver achieved fell by a further 11% year-on-year. Gold prices also fell.
The company said it remains on track to meet its full-year production target of 21.0 million attributable silver equivalent ounces.
Hochschild said its Inmaculada project made good progress in the period, as it moves towards completion at the end of the year.
The company said its balance sheet has sufficient capacity to complete the construction of Inmaculada and fund its convertible loan repayment due in October.
"The short term outlook for our underlying markets remains uncertain, but with the beginning of Inmaculada's operation imminent, the cash optimisation programme generating better than expected results and the financial position of the company secure, I am confident that we can look forward to an exciting twelve months as our latest capital project delivers new growth for the company and our shareholders," said Chief Executive Officer Ignacio Bustamante in a statement.
Hochschild Mining shares were up 1.4% at 162.20 pence, one of the top five gainers in the FTSE 250 Wednesday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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