(Alliance News) - Hochschild Mining PLC said on Wednesday that it is on track to meet its 2019 output target but that profit and revenue fell during the first half of the year after a decline in silver sales.
In the six months to June 30, total gold equivalent production fell by 3.2% to 288,530 ounces from 297,940 a year before, though Hochschild said it is in line to deliver the 457,000 ounces of gold equivalent it forecast for the whole of 2019.
Total production figures include the production attributable to the minority shareholder at Hochschild's San Jose mine in Argentina.
Hochschild, which mines throughout the Americas, said it achieved its second highest ever half-year gold equivalent attributable production in history, totalling 245,325 ounces.
In silver equivalent, attributable production fell by 4.5% to 19,871 ounces from 20,812 ounces.
Attributable production excludes the production attributable to the minority shareholder at San Jose.
The FTSE 250-listed miner said revenue fell by 4.8% year-on-year to USD354.5 million from USD372.3 million and pretax profit sunk by 24% to USD29.5 million from USD38.6 million.
Gold sales rose by 1.4% to 160,250 ounces from 158,010 ounces with the average realised price of the precious metal also rising slightly to USD1,329 per ounce from USD1,309.
Silver sales were down by 7.6% to 10,221ounces from 11,067 ounces with the average realised price falling 7.4% to USD15.00 per ounce from USD16.20.
The firm noted that, due to higher personnel costs, administrative fees rose by 6% to USD23.0 million from USD21.7 million and exploration expenses totalled USD18.6 million, 43% higher than the USD13.0 million a year ago. This was attributed to a rise in Hochschild's investment in brownfield and greenfield programmes.
Hochschild declared an interim dividend of 2.0 cents per share, up slightly from 1.965 cents last year.
Chief Executive Ignacio Bustamente said: "Hochschild has delivered another strong first half operational performance with the second highest level of production in our history and solid cost control leaving us firmly on track to meet our 2019 goals.
"We are in the middle of another busy period of brownfield exploration with new veins discovered at Inmaculada and the first campaign at the Palca zone already underway whilst further programmes are due in the second half at all our operations. Healthy cashflow generation has continued to strengthen our balance sheet and we are therefore in a good position to execute our brownfield and greenfield strategy in addition to assessing acquisitions and investing in our innovation programme.
The company's shares were 2.6% lower at 216.20 pence each in London on Wednesday morning.
Hochschild (HOC)