Hochschild Mining (HOC) H2 2023 earnings summary

Executive summary

• 2023 delivered $693.7m revenue, $274.4m Adjusted EBITDA and $0.02 EPS; AISC was $1,454/oz, below revised guidance.

• Growth priorities advanced with Inmaculada’s 20-year permit, Mara Rosa’s first gold pour and the Monte do Carmo option; focus remains on production growth, lower costs and disciplined capital allocation.

Financial highlights

• Pre-exceptional revenue fell 6% to $693.7m from $735.6m; gross profit was $185.5m vs. $208.0m and operating income was $82.1m vs. $45.2m.

• Pre-exceptional net profit was $9.5m vs. $6.7m; attributable net profit was $9.0m vs. $4.9m, and EPS was $0.02 vs. $0.01.

• Adjusted EBITDA increased to $274.4m from $249.6m, despite lower revenue and production volumes.

• Exceptional items were a net $69.5m charge, including asset impairments and Pallancata restructuring, partly offset by a $27.4m tax effect.

Outlook and guidance

• 2024 attributable production guidance is 343–360 koz AuEq; AISC guidance is $1,510–$1,550/oz AuEq and sustaining and development expenditure is $171–$178m.

• Production is forecast at 340–375 koz AuEq in 2025 and 2026; group AISC is forecast at $1,300–$1,400/oz in 2025 and $1,100–$1,200/oz in 2026, excluding exploration expenses.

• Mara Rosa is expected to reach commercial production by end-H1 2024; attributable production forecasts are 83–93 koz in 2024, 95–105 koz in 2025 and 88–98 koz in 2026.

• Royropata is targeted to start production in 2027 at an average 100 koz AuEq/year; $33m is budgeted for 2024 brownfield exploration.