Hochschild Mining (LSE:HOC) delivered a substantial improvement in its first-half financial performance, with higher precious metals revenue helping to more than double adjusted EBITDA and strengthening the group’s balance sheet.
Revenue increased 62% to $844.4 million, while adjusted EBITDA climbed to $491.5 million. Profit before tax reached $365.8 million and basic earnings per share stood at $0.37.
Strong cash generation allowed Hochschild to move into a net cash position of $51.1 million while retaining significant liquidity. The improvement came despite substantial payments relating to 2025 dividends for shareholders and distributions to its San Jose joint-venture partner.
The company also increased its interim dividend to 4.0 cents per share, reflecting the stronger financial position.
Production falls as all-in sustaining costs rise
Operational performance was more mixed, with attributable production declining to 151,830 gold equivalent ounces during the first half.
All-in sustaining costs increased to $2,448 per gold equivalent ounce, leading Hochschild to raise its cost guidance for the full year.
Despite the increase in expected costs, management maintained its existing full-year production and capital expenditure targets.
Controlling operating costs will therefore remain an important focus during the second half as Hochschild seeks to translate favourable revenue and earnings momentum into continued cash generation.
Mara Rosa turnaround progresses
Hochschild said the operational turnaround at its Mara Rosa gold mine in Brazil is progressing according to plan, while work continues on the Monte Do Carmo development project.
The company is advancing Monte Do Carmo towards an investment decision expected around the end of the year, providing another potential growth catalyst for the portfolio.
Exploration activity is continuing across the group’s assets as Hochschild looks to extend mine lives and identify additional resources capable of supporting longer-term production.
Safety and sustainability performance remains mixed
Hochschild reported improvements across several environmental, social and governance indicators, including better overall safety rates and incremental progress in water efficiency, recycling and workforce diversity.
However, the period was overshadowed by a fatality at the Inmaculada operation in Peru, highlighting the continuing importance of safety performance across the group’s mines.
The company’s wider investment outlook is supported by its improved financial performance, stronger margins and positive free cash flow, although historical volatility in earnings and cash generation remains a consideration.
Share-price technical indicators are broadly constructive, reflecting a strong upward trend and positive MACD. However, elevated RSI and stochastic readings suggest the shares may be overbought in the near term.
Valuation also presents a potential headwind, with a price-to-earnings ratio of approximately 21.8 times and a dividend yield of around 0.69%.
More about Hochschild Mining
Hochschild Mining is a London-listed precious metals producer focused on the exploration, mining, processing and sale of gold and silver across the Americas.
The group’s operating portfolio includes the Inmaculada underground mine in southern Peru, the San Jose underground operation in southern Argentina and the Mara Rosa open-pit gold mine in Brazil.
Alongside its producing assets, Hochschild maintains a portfolio of exploration and development projects intended to support future production and extend its presence in the precious metals sector.
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