12th Mar 2014 08:51
LONDON (Alliance News) - Hochschild Mining PLC Wednesday said it swung to a pretax loss in 2013 as lower revenues, higher costs, and impairments hit the company, forcing Hochschild to "suspend" its dividend for the year.
The precious metals producer posted a pretax loss of USD119.6 million compared from a pretax profit of USD212.3 million the previous year, as revenues fell 24% to USD622.2 million from USD818.0 million in 2012.
The company said its revenues fell as its average realised precious metals prices fell due to market price decreases in 2013. Its realised average gold price was USD1,338 per ounce for gold, down from USD1,684 per ounce the previous year, and its realised price for silver was USD22.12 per ounce, rather than USD31.62 per ounce in 2012.
Hochschild also noted that its cost of sales increased 12% to USD469.2 million from USD420.3 million the previous year, and it was hit by a USD90.7 million impairment charge due to market conditions, with a USD40.9 million impairment at its San Jose mine in Argentina, a USD30.3 million impairment at its Azuca mine in Peru, and a USD29.1 million impairment at its Crespo project in Peru, among others.
As a result, the company suspended its full-year dividend given the prevailing market conditions and ahead of sizeable capital expenditure at its flagship Inmaculada project in Peru. Hochschild said it doesn't plan to reinstate the dividend until the company's cash position improves.
In January, the company said its full-year attributable silver equivalent production has exceeded its target following improved production at its San Jose mine.
The company said at the time that it achieved attributable silver equivalent production of 20.5 million ounces for the full-year 2013, exceeding the company's target of 20.0 million ounces.
The company said that it delivered full-year production of 13.6 million ounces of silver and 116,000 ounces of gold, with particular increases in production and grades from the company's San Jose operation where the total silver equivalent production was up 11% on the previous year to 12.3 million ounces.
On Wednesday, the company maintained its full-year 2014 attributable silver equivalent production guidance at 21.0 million ounces and reiterated its target of almost 35 million ounces in 2017.
Hochschild Mining shares were down 12% to 173.75 pence in early trading Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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