Hochschild shakes off first-half political uncertainty as profit jumps

(Alliance News) - Hochschild Mining PLC on Wednesday backed its annual output guidance and said ...

Alliance News 18 August, 2021 | 7:47AM
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(Alliance News) - Hochschild Mining PLC on Wednesday backed its annual output guidance and said it made "good progress" in the first half of 2021.

The precious metals producer said it faced Covid-19 challenges and political change in Peru during the period. In June, it also reported a road accident which killed 26 people that worked in its Pallancata silver and gold mine in southern Peru.

Shares in Hochschild were 1.3% higher at 153.40 pence each in London on Wednesday morning.

In the six months to June 30, pretax profit surged to USD83.8 million from USD6.5 million a year before, thanks in part to the non-repetition of USD20.2 million in administrative expenses and USD12.7 million in exploration expenses. Revenue grew sharply to USD394.8 million from USD232.0 million.

Attributable gold produced rose 34% year-on-year to 106,000 ounces, while attributable silver production was up 44% to 5.9 million ounces.

Looking ahead, Hochschild said it is on track to deliver its overall 2021 production target of 360,000 to 372,000 gold equivalent ounces and 31.0 to 32.0 million silver equivalent ounces.

"The first half of 2021 has delivered a number of operational and environmental, social, and corporate governance challenges and I believe the admirable response of our company and our people has ensured we are making good progress on all of our 2021 priorities despite the unprecedented tragic traffic accident in June, the continuation of the Covid-19 pandemic in addition to local political change," Hochschild said.

The company said it has been "fully supportive" as local authorities investigate the crash.

General elections in Peru kicked off in April, with a closely-contested presidential run-off vote occurring in June.

"Mining has always been and continues to be a politicised issue and, as a result, risks associated with social conflict were heightened during this period," Hochschild explained.

The company said it plans to declare an interim dividend by the end of the month. In 2020, it paid a 4.0 US cents interim payout, though this was not declared alongside its first-half results.

By Eric Cunha; ericcunha@alliancenews.com

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Hochschild Mining PLC 176.40 GBX -3.50 -

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