Precious metals miner Hochschild Mining reported a drop in full-year earnings on Thursday as Covid-related stoppages dented production and offset higher gold and silver prices.
In the year to the end of December 2020, adjusted earnings before interest, tax, depreciation and amortisation fell to $270.9m from $343.3m in 2019, with revenue down to $621.8m from $755.7m. Pre-tax profit declined to $62.9m from $76.8m, even as the company saw a 28% rise in the average realised gold price achieved and a 35% jump in the silver price.
Hochschild said the year was impacted by events beyond its control and it was forced to shut all three of its operations in mid-March as both its host countries took steps to contain the spread of the coronavirus.
Despite a relatively quick restart in May, both the Inmaculada and San Jose mines experienced additional Covid-related stoppages, although Pallancata in Peru operated without interruption for the remainder of the year.
“Nevertheless, we were able to reconfigure our mine plans and I was pleased to see us meeting our revised annual production and costs targets,” it said.
“We entered the crisis with a strong balance sheet which enabled us to finance the additional Covid-related expenses required by the business. In addition, with precious metal prices rising significantly, our business was able to generate strong free cashflow despite the ongoing disruption.”
