18th Feb 2022 15:53
(Alliance News) - Analysts at Peel Hunt said fourth-quarter results from Yamana Gold Inc beat the broker's forecasts "almost across the board".
Shares were up 11% at 365.00 pence in London on Friday afternoon. Peel Hunt rates Yamana shares a 'Buy' with a price target more than 50% above the current quote. Yamana has a market capitalisation of USD4.40 billion.
Yamana on Friday said it produced a record amount of gold in the final quarter of 2021, resulting in record output for the full year as well and strong financial results.
Yamana is a Toronto-based miner operating in Canada, Brazil, Chile and Argentina. Its mines produced 281,388 gold equivalent ounces in the three months that ended December 31, up from 255,361 a year before and beating guidance of 270,000 ounces.
Gold equivalent is calculated using a ratio of gold and silver production, but Yamana said the increase was led by gold production, which at 240,718 ounces also was a record for the company.
For the year as a whole, Yamana produced 1.01 million gold equivalent ounces, up from 901,155 ounces in 2020 and slightly beating 2021 guidance of 1.00 million ounces. Looking ahead to 2022, Yamana said gold equivalent production will be no less than 1.00 million ounces again; however, it raised it further-out guidance to 1.03 million ounces in 2023 and 1.06 million in 2024.
Yamana booked net earnings of USD109.7 million in the final quarter of 2021, up 6.5% from USD103.00 million a year ago. For all of 2021, however, net earnings were USD147.5 million, down from USD203.6 million in 2020. The 2020 figure benefited from a USD191.0 million net reversal of mine property impairment.
Earnings per share were flat at USD0.11 in the fourth quarter on a year before. For 2021 as a whole, EPS shrank to USD0.15 from USD0.21.
Revenue rose 9.1% to USD503.8 million in the fourth quarter of 2021 from USD461.8 million a year before. In all of 2021, revenue totalled USD1.82 billion, up 16% from USD1.56 billion.
Average realised gold price was USD1,796 per ounce in the final quarter, down from USD1,875 a year before. Total costs were USD1,091 per ounce, down from USD1,131 a year before. All-in sustaining costs were USD962, down from USD1,076. Yamana said it expects AISC of USD1,080 per ounce in 2022. Gold was quoted at USD1,897.40 an ounce on Friday afternoon in London.
Peel Hunt said fourth quarter revenue beat its forecast of USD494 million. EPS also beat the broker's estimate of USD0.09. The earnings beat resulted from lower-than-expected AISC, but the broker said the AISC forecast for 2022 of USD1,080 was slightly above its forecast of USD1,032.
Yamana declared a dividend of USD0.03 for the first quarter of 2022, implying a USD0.12 annual payout. Both are unchanged from 2021.
"A great 4Q21 but 2022 looks relatively in line from guidance," Peel Hunt said.
By Tom Waite; [email protected]
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