Gold miner Centamin (CEY) saw its shares rally almost 10% to 134p on Wednesday after announcing better than expected half year results.
In the six months to 30 June the FTSE 250 firm reported EBITDA (earnings before interest, tax, depreciation and amortisation) of $117m, 4% better than what the market expected, according to analysts at Jefferies.
FIRM GOLD PRICING
It also maintained both its full year production guidance at 490,000 to 520,000 ounces of gold, and its all-in sustaining cost of $890 to $950 per ounce.
This will help reassure shareholders it can cash in on the rising gold price this year. The precious metal is currently changing hands at $1,428.45 an ounce, near five-year highs.
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The company has also declared an interim dividend of $0.04 per share, which was also better than the $0.03 expected and gives an annualised dividend yield of 5%.
Centamin CEO Andrew Pardey said the decision to increase the interim dividend was based on the firm’s ‘strong financial position’, as well as ‘assessment of near and medium-term capital allocation’ and confidence in future cash flow generation.
CASH FLOW
The company’s adjusted free cash flow - always an important metric to look at with miners - fell 1% to $35.7m, but Pardey said this should increase in the second half of the year, with the company focused on focused on driving further future growth and ‘value enhancing opportunities’.
While it’s worth noting that the better than expected EBITDA and dividend overlooked the fact Centamin did report a 26% drop in overall pre-tax profit to $59.6m, while revenue fell 3% to $288.1m as sales of gold slipped.
