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Central Asia Metals hikes final dividend after 'strong' year of production

Tue 30 March 2021 10:34 | A A A

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(Sharecast News) - Central Asia Metals declared a final dividend of 8p per share for 2020 on Tuesday, up from zero in the prior year, even as earnings and revenue fell year-on-year.

The AIM-traded firm said that would make for a 2020 full-year dividend of 14p per share, up from 6.5p per share in 2019, and represented 57% of free cash flow in the year ended 31 December.

Group gross revenue for the 12 months totalled $170.3m (£123.6m), down from $180.8m year-on-year, while group net revenue came in at $160.1m, falling from $171.7m.

It reported group EBITDA of $95.7m, down from $108.6m in 2019, as its EBITDA margin narrowed to 56% from 60%.

Group profit before tax was $59.8m, down from $67.8m.

The cash cost for Sasa C1 zinc equivalent was 50 US cents per pound for the year, up from 47cents per pound a year earlier, while Kounrad C1 copper cash costs came in at 51cents per pound, down marginally from 52cents in the prior year.

Earnings per share from continuing operations totalled 24.78cents, down from 29.36cents, while group free cash flow shrunk to $58.9m from $69.8m.

Group net debt as at 31 December totalled $36.2m, down from $80.2m at the end of 2019, while cash at bank at year-end was $47.9m, up from $32.6m.

The company made gross debt repayments of $38.4m in 2020, in line with the repayments it made in 2019.

On the operational front, Central Asia Metals reported zinc in concentrate production of 23,815 tonnes for the year, up slightly from 23,369 tonnes, while lead in concentrate production came in at 29,742 tonnes, rising from 29,201 tonnes.

Copper production, meanwhile, was also up slightly at 13,855 tonnes, compared to 2019's total of 13,771 tonnes.

Looking at the current year, the company released production guidance at Sasa for zinc in concentrate of between 23,000 and 25,000 tonnes, and for lead in concentrate of between 30,000 and 32,000 tonnes.

At Kounrad, it was looking at copper production of between 12,500 and 13,500 tonnes.

"I am pleased to report a strong set of operational and financial results for the 2020 financial year, despite some challenges," said chief executive officer Nigel Robinson.

"Costs at both operations were well controlled and, in particular, our capital expenditure was almost 30% below our initial guidance due to savings and deferrals made during the year with a view to conserving cash.

"We met all of our contractual debt repayment obligations and ended the year with a robust balance sheet and $36.2m of net debt."

Robinson noted that once the final dividend was paid, the company would have returned $209.6m to shareholders over the last nine years.

"While the tailings storage facility four leakage at Sasa was a notable negative for us, we dealt with this incident swiftly, appropriately and transparently.

"By the end of 2020, we had removed from the river an estimated 95% of the tailings that had spilled and our procedures to remove the remaining 5%, as well as focus on biodiversity and regeneration, are well advanced.

"We have also committed to develop a 'Youth Park' along the banks of the river during 2021, which will see us build walking trails, plant trees and flowerbeds, as well as construct fountains, a pagoda and a children's play area as a fitting community project following this incident."

Nigel Robinson said the company had continued its focus on other sustainability aspects, and was on track to publish its second sustainability report in the second quarter of 2021, which would be its first to Global Reporting Initiative standards.

"We move into 2021 in a strong position with significantly improved commodity prices, producing the base metals which are essential for modern living, profitably and in a safe and sustainable environment for all our stakeholders."

At 1017 BST, shares in Central Asia Metals were up 1.62% at 251.5p.

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