Record gold prices pushed Hochschild Mining back into the black last year, leading it to restore dividend payments to shareholders.
Hochschild, one of London’s largest goldminers, said revenues in the 12 months to the end of December had jumped 37 per cent to a record $947.7 million as it benefited from a sharp rally in the price of gold and higher production.
The higher sales pushed Hochschild back into the black as it posted a pre-tax profit of $177.2 million, against a $43.5 million loss a year earlier.
Gold production rose to 245,000 ounces over the entire year, up from 186,000 ounces in 2023, while silver output was 8.5 million ounces, lower than 9.5 million ounces a year earlier.
The average realised price of gold rose to $2,345 an ounce during 2024, up from $1,974 a year earlier. The price of gold, often seen as a safe-haven in times of uncertainty, continued to set new records last year as the war in Ukraine continued and the conflict in the Middle East threatened to escalate.
Prices have been further buoyed by expectations of more interest rate cuts by the US Federal Reserve. Lower interest rates are seen as a boon for gold, since it reduces the opportunity cost of holding an asset that does not offer a yield.
Hochschild pulled its dividend two years ago after profits slid. This has been reinstated, with management proposing a final dividend of $1.94 a share. The payout forms part of the group’s new dividend policy, which includes a minimum payout of $10 million to shareholders a year.
Eduardo Landin, chief executive, hailed the group’s financial performance, its best in 13 years, saying it was “dedicated to maximising value, optimising costs and ensuring long-term value”.
He said the group’s exploration efforts throughout the period added 2.8 million gold equivalent ounces to its resource base across its operations.
Hochschild is forecasting production of silver and gold will be between 350,000 and 378,000 ounces for the present financial year, with its Mara Rosa mine in Brazil anticipated to produce between 94,000 and 104,000 ounces of gold.
Hochschild, which was founded in 1911 by Moritz Hochschild, one of South America’s so-called tin barons, operates three mines in Argentina, Peru and Brazil.
Peter Mallin-Jones, an analyst at Peel Hunt, said the resumption of dividends “places visible discipline on management and with exploration adding significantly to the operating asset resource base, cash flow duration is extended”.
The shares, which have more than doubled in value in the past 12 months, closed up 24¼, or 12.6 per cent, to 216p.
