Endeavour Mining's Q1 profits drop but guidance unchanged

(Sharecast News) - Gold miner Endeavour Mining on Thursday reported a drop in production and selling volumes in the first quarter, along with a big jump in costs, though adjusted profits came in line with expectations. The company, which operates mines in Côte d'Ivoire, Burkina Faso and Senegal, said gold output dropped 22% over the three-month period to 219,000 ounces, while gold sold fell 21% to 225,000 ounces.

Meanwhile, the all-in sustaining cost was up 25% compared with the fourth quarter of 2023 at $1,186 an ounce, partially offset by a 5% improvement in the realised gold price to $2,041 an ounce.

As a result, first-quarter revenues totalled $473m, broadly flat on the first quarter of 2023 but well below the $579m reported in the fourth quarter.

Earnings from mine operations declined to $130m, from $178m the year before and $198m in the fourth quarter, coming up short of the $143m expected by analysts at Berenberg. However, adjusted EBITDA of $213m, while down 27% compared with the fourth quarter, was in line with estimates.

"Our operational performance is tracking in line with our group guidance, as production and costs are expected to progressively improve throughout the year, with performance strongly weighted towards the second half, as our two organic growth projects ramp up, and we expect significantly stronger performance from our Houndé mine," said chief executive Ian Cockerill.

"Despite investing over $235 million in organic growth, exploration and shareholder returns during the quarter, our leverage remains healthy at 0.80x net debt to adjusted EBITDA, and we are well positioned to quickly de-lever our balance sheet and increase our commitment to shareholder returns, to reflect our transition from a phase of growth to one focused on cash flow generation."

The stock was down 2.2% at 1,659p by 0944 BST.