Hochschild Mining (HOC) H1 2024 earnings summary

Executive summary

• Revenue increased 25% year-over-year to $392 million, driven by higher production, gold and silver prices, and the ramp-up at Mara Rosa and Inmaculada mines.

• Adjusted EBITDA rose 79% to $178 million, with net profit at $64 million, reversing a prior year loss.

• All-in sustaining cost (AISC) at $1,510/oz, at the lower end of 2024 guidance.

• Focus remains on core business, production growth, cost reduction, and disciplined capital allocation.

• Strong ESG performance, with improved safety metrics and best environmental results since KPI inception.

Financial highlights

• Gross profit increased 127% to $143.6 million, and operating income rose to $96.3 million from $14.2 million.

• Net profit reached $64 million, up from a $4.4 million loss; net cash at $89 million, net debt at $271 million, and net debt/EBITDA at 0.8x.

• All-in sustaining cash cost at $1,510/oz, at the lower end of guidance.

• Cost of sales reduced by $3 million year-over-year due to production mix shift.

• Exceptional item: $12.5 million impairment (net of tax) on Azuca asset.

Outlook and guidance

• 2024 production guidance reaffirmed at 340,000–375,000 gold equivalent ounces, with further increases expected in 2025 and 2026.

• AISC expected to decline to $1,300–$1,400/oz in 2025 and $1,100–$1,200/oz in 2026.

• CapEx to be more weighted in H2 2024; total sustaining and development capex expected at $171–178 million for the year.

• Board to reevaluate potential for capital returns at full year results in early 2025.

• Royropata project expected to deliver 100,000 oz+ per year from 2028.