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(Alliance News) - Hochschild Mining PLC announced on Thursday that its profit and revenue dropped in 2022, but it remains confident of "significant levels" of profitability in the future.
Shares in Hochschild were down 15% at 76.70 pence in London on Thursday.
The silver and gold mining business, which has operations in North and South America, reported revenue of USD735.6 million for the year ended December 31, compared to USD811.4 million for 2021.
Hochschild's profit before income tax was USD25.8 million, an 81% decrease from its profit of USD137.3 million the previous year.
Hochschild reported year-on-year increases in administrative and exploration expenses, to USD54.1 million from USD51.9 million and to USD56.8 million from USD39.8 million respectively.
The company's adjusted earnings before interest, taxes, depreciation and amortisation amounted to USD249.6 million, a 34% drop from USD382.8 million the previous year.
Basic earnings per share decreased over the same period from USD0.15 to USD0.01. Hochschild's cash equivalent balance, meanwhile, dropped to USD143.8 million from USD386.8 million.
"In 2022, precious metal prices experienced considerable volatility. Gold rose to over USD2,000 per ounce in the first quarter of the year as the Ukraine war started but then fell steadily by 20% to just over USD1,600 by November as expectation of global interest rate rises became the theme. A rebound in December left the metal flat versus 2021 with silver rising by 3% during the year," said Chair Eduardo Hochschild.
In 2022, Hochschild said it had attributable gold production of 206,000, down from 221,000 in 2021, while attributable silver production was 11.0 million ounces, down from 12.2 million ounces.
Looking ahead, Hochschild set a 2023 production target of between 301,000 to 314,000 gold equivalent ounces.
Chair Hochschild continued: "These increases have continued in the first quarter of 2023 and consequently, we are confident that when combined with our operational track record and good cost control, we can maintain significant levels of profitability and continued good cash flow.
"Strong balance sheet discipline will be crucial as construction at Mara Rosa continues towards its completion in 2024 and therefore the board feels that it would be imprudent to pay a final dividend for 2022 at this stage but will reassess the potential for capital return at the interim results in August."
By Emma Curzon, Alliance News reporter
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