FTSE 250 gold miner Centamin (CEY) has hiked its interim dividend by 50% after reporting a big jump in profit, powered by the rising gold price.

Consistent with its commitment to returning surplus cash to shareholders, Centamin has declared an interim dividend of six US cents per share, up from four cents last year, which equates to a $69.4 million payout in total and will be paid on 11 September.

The payout represents 68% of free cash flow generated, and the company said that on payment, the implied dividend yield would be approximately 6.25% and equivalent to distributing to shareholders $368 per ounce of gold produced.

Speaking to Shares, Centamin chief executive Martin Horgan said the miner was cognisant that the ‘ability to commit to a sustainable dividend is a key part of the Centamin story’ for shareholders.


The payout comes after the miner reported a whopping 221% jump in pre-tax profit to $191 million in the six months to 30 June, as revenue increased 56% to $448 million.

Despite the big jump, market reaction was somewhat muted with Centamin shares rising just 0.6% to 208p in early trade.

Gold production was up 9% to 256,000 ounces as the company managed to shake off any operational challenges from the coronavirus pandemic, while its average realised gold price during the period was $1,657 per ounce, with all-in sustaining costs of $899 per ounce sold, within its annual guidance range of $870 to $920 per ounce.

Adjusted group free cash flow generated was $102 million, after $114 million was distributed in profit share and royalties to its partner, the Egyptian state.


Regarding the outlook for the rest of 2020, Horgan said Centamin has ‘good visuals’ on the second half of the year in terms of production and cost control.

The miner remains on track to meet full-year production guidance of between 510,000-525,000 ounces of gold, and cost guidance of between $630-680 per ounce produced in cash costs and $870-920 per ounce sold in AISC.

Horgan said, ‘We have reasonable visibility to the end of December. There will be challenges with Covid-19 but we have a robust framework in place and the ability to roll with the punches Covid throws at us. We’re in a strong place, financially and operationally.’


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Issue Date: 04 Aug 2020