CENTAMIN posted third quarter earnings before interest, tax, depreciation and amortisation (EBITDA) of $48.7m, an increase of 6% over the previous quarter as gold production began to recover on higher grades.
The firm’s Sukari gold mine in Egypt has been in lower grade areas at its underground and open pit sections, some of which took longer to work through than anticipated. Output for the third quarter totalled 117,720 ounces, representing a 27% improvement second quarter production.
Gold sales, however, were 9% lower quarter-on-quarter owing to a timing difference between the final month-end gold pour and the gold shipment schedule. Some 20,163 in gold ounces will be sold with the next shipment feeding into fourth quarter revenue.
An increase in the royalty due to the Egyptian government affected Centamin’s basic share earnings which fell 29% quarter-on-quarter. The Concession Agreement with Egyptian Minerals Resources Authority has applied an agreement that the profit share ratio with the company move to 55:45 from the previous ratio of 60:40.
Shares in the company were about 2.4% lower on the London Stock Exchange. On a 12-month basis, the stock is down about 32%.
“Overall, a negative set of results,” said Goldman Sachs in a note. It added that: “Both Revenues and EBITDA were a miss on the back of lower gold sales. While this is a timing issue – given the recent string of disappointments, we believe that investors are likely to take this set of results as negative”.
