Centamin FY17 profit, Ebitda falls on higher costs, lower revenues

31st January 2018 By: Donna Slater - Features Deputy Editor and Chief Photographer

JOHANNESBURG (miningweekly.com) – Higher production and operating costs and lower revenues resulted in gold miner Centamin’s pretax profit falling by 16% year-on-year to $224.09-million for the year ended December 31.

Similarly, its earnings before interest, taxes, depreciation and amortisation fell by 13% year-on-year to $326-million.

Cash costs increased from $513/oz in 2016 to $554/oz in 2017.

Although all-in sustaining costs remained within Centamin’s forecast of $790/oz, this was higher than in 2016.

Revenues were down 2% year-on-year, at $676-million. Although gold prices were 0.4% higher year-on-year, Centamin had sold less gold in 2017.

Full-year production was 1% lower year-on-year, but higher than the original guidance of 540 000 oz, at 544 658 oz.

The miner also achieved a 4% year-on-year improvement in processing throughput to 12-million tons; a 14% year-on-year improvement in openpit total material movement to 70.9-million tons; and a 47% year-on-year improvement in openpit ore production to 16.09-million tons.

The miner had produced strong cash flows, with $142-million of free cash flow in 2017.

This was, however, 41% lower than in 2016, mainly as a result of the impact of increased profit share payments.

Centamin’s earnings a share decreased by 49% year-on-year as a result of lower revenues, higher costs and the impact of the first full year of profit share.

Centamin, which expects to produce 580 000 oz of gold this year, remains debt-free and unhedged.

Meanwhile, the gold miner paid $133.3-million to the Egyptian government in 2017, $981 000 to Burkina Faso’s government, $1.5-million to the Australian government and $35 253 to Côte d'Ivoire’s government.

In terms of exploration, the Sukari operation is driving high-grade underground reserve expansion in excess of annual depleted mined ounces.

The miner also managed to expand on the 2017 maiden resource at Doropo Project in Côte d'Ivoire to 1.35-million ounces indicated and 900 000 oz inferred, with the main structure remaining open.

Also in Côte d'Ivoire, results from exploration at the ABC project show delineated outcropping 12 km strike-length gold-bearing structure; while in Burkina Faso, Centamin reported drilling targeted resource and reserve expansion near Konkera.