Sierra Metals (SMTS) Q4 2024 earnings summary

Executive summary

• Achieved record operational and financial performance in 2024, surpassing production and cost guidance at both Bolivar and Yauricocha mines, and delivering strong safety and sustainability results.

• Divested Cusi Mine, revitalized board, and listed on the Lima Stock Exchange.

• Implemented key safety and community initiatives, including emergency response upgrades and water projects.

• Successfully refinanced long-term debt into a $95 million facility, enhancing financial flexibility.

• Management expects further production increases, lower costs, and stronger cash flows in 2025, targeting ~$130 million EBITDA.

Financial highlights

• 2024 revenues exceeded $272 million, up 19% year-over-year, driven by higher production and metal prices.

• Adjusted EBITDA from continuing operations reached $74.2 million, a 44% increase over 2023.

• Net income from continuing operations was $17.5 million, reversing a loss of $6.6 million in 2023.

• Cash and cash equivalents at year-end were $19.8 million, more than double the prior year.

• Net debt-to-EBITDA ratio improved to 1.0x at year-end.

Outlook and guidance

• 2025 production guidance targets further growth: copper 48.5M lbs, zinc 58.4M lbs, silver 2.06M oz, gold 15.9k oz, lead 13.7M lbs.

• All-in sustaining costs at Bolivar projected to rise to $345-$362 per copper equivalent pound in 2025, while Yauricocha's costs are expected to fall to $291-$311, a 20% reduction.

• EBITDA guidance for 2025 is $130 million, based on copper at $4.20/lb and gold at $2,300/oz.

• CapEx for 2025 expected to be around $75 million, similar to 2024, with a decrease anticipated in subsequent years.

• Year-end 2025 debt projected at $85 million after $10 million principal repayment.