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Americas-focused Hochschild narrows H1 loss

Americas-focused Hochschild narrows H1 loss

Photo by Reuters

20th August 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Despite lower realised precious metals prices, Central and South America-focused Hochschild Mining on Wednesday reported a narrowed net loss for the six months ended June 30, as the company’s cost-cutting initiatives gained traction and silver output rose.

The company narrowed its loss from continuing operations to $1.55-million, compared with a loss from continuing operations of $25.22-million in the first half of 2013.

Hochschild reported a 4% rise in adjusted earnings before interest, tax, depreciation and amortisation to $94.3-million, from $90.4-million a year earlier, enhanced by its cost-cutting programme and increased output from its mines in Peru and Argentina.

However, net revenue fell 9% to $282-million, compared with $308.6-million in the first half of 2013.

"The current level of capital expenditure (capex) required by the Inmaculada project [in Peru] 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," executive chairperson Eduardo Hochschild said.

Hochschild reduced its capex in the first-half by $67-million.

The company reported consolidated output of 11.9-million ounces of silver equivalent in the first-half, at significantly lower cost. Silver output rose 11% year-on-year to 8.5-million ounces but gold output fell 14% to 55 500 oz. The average realised silver price fell 11% year-on-year. Gold prices were also lower.

The company said it remained on track to meet its full-year output guidance of 21-million attributable ounces of silver equivalent.

Hochschild said its Inmaculada project had made good progress in the period, as it moved towards completion at the end of the year.

The company said its balance sheet had enough 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," CEO Ignacio Bustamante said.

Hochschild Mining's shares were up 6% at £1.622 apiece on the London Stock Exchange on Wednesday.

Edited by Creamer Media Reporter

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