Sotkamo Silver (SOSI) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw restored profitability, with EBITDA margin rising to 44% and net sales up 4% year-over-year to 114 MSEK, driven by higher metal prices and increased zinc output.

• Silver head grade and production improved sequentially, supported by new mining levels and operational efficiency measures.

• Cash position strengthened to 76 MSEK, aided by the release of a 3.5 MEUR environmental collateral.

• Exploration and infill drilling investments aim to extend mine life and improve production predictability.

Financial highlights

• Net sales for Q3 2024: 114 MSEK (+4% year-over-year, +35% vs Q1 2024, +8% vs Q2 2024).

• EBITDA: 50 MSEK (+34% year-over-year), EBITDA margin 44% (up from 34%).

• EBIT: 30 MSEK (+75% year-over-year).

• Cash and cash equivalents: 76 MSEK (up from 65 MSEK year-over-year).

• Investments in Q3: 18 MSEK, mainly for exploration and infill drilling.

Outlook and guidance

• 2024 guidance unchanged: silver production expected at 1.2–1.4 million ounces, annual EBITDA margin at least 28%, net debt-to-EBITDA below 2.0 at year-end.

• Medium-term targets to 2025: annual silver production >1.5 million ounces, EBITDA margin >30%, net debt-to-EBITDA <2.0, and extending mine life to 2035.

• Profitability remains sensitive to metal prices, exchange rates, and inflation.