Sotkamo Silver (SOSI) Q1 2025 earnings summary

Executive summary

• Mining challenges in Q1 2025 led to significant reductions in production volumes, sales, and profitability, with net sales declining 19% year-over-year to 69 MSEK.

• Silver production dropped 45% to 169,000 ounces from 309,000 ounces year-over-year due to lower ore grades, operational disruptions, and a temporary halt in February caused by a vehicle fire.

• EBITDA was negative at -8 MSEK, down from 17 MSEK a year earlier, with a negative margin of -10.9%.

• Cash and cash equivalents dropped to 1–1.2 MSEK from 37.6–38 MSEK, mainly due to loan repayments and negative cash flow.

• Efforts to access better quality stopes and operational improvements began to stabilize operations by quarter-end.

Financial highlights

• Net sales decreased by 19% to 69 MSEK compared to 85 MSEK in Q1 2024, mainly due to lower mining volumes and metal production.

• EBITDA was negative at -8 MSEK, down from 17 MSEK; EBIT fell to -24 MSEK from -1 MSEK.

• Net loss for the quarter was -39.7 MSEK, with EPS at -0.14 SEK (non-diluted).

• Cash and cash equivalents at quarter-end were 1–1.2 MSEK, down from 37.6–38 MSEK a year earlier.

• CAPEX was 16 MSEK, focused on exploration and mine development, nearly unchanged year-over-year.

Outlook and guidance

• Annual silver production for 2025 is targeted at 1.2–1.4 million ounces, with silver head grade expected to recover to 90–110 g/tonne.

• EBITDA margin for 2025 is guided to be at least 30%, and net debt-to-EBITDA below 1.5 by year-end.

• Medium-term targets will be updated in the second half of 2025.

• Profitability remains sensitive to metal prices, exchange rates, ore volumes, and grades.