Silvercorp quarterly revenue, profit decline after output hit by COVID-19 shutdowns
Silvercorp Metals Inc. (TSX, NYSE American: SVM) reported Thursday that its profit and revenue fell during the fiscal fourth quarter that ended March 31 due to the COVID-19 pandemic, with both production and prices received for its metals lower than a year ago.
Silvercorp is a Canadian company producing silver, lead and zinc from mines in China, where the pandemic began and the first country to institute shutdowns. Silvercorp recently agreed to acquire Guyana Goldfields Inc. (TSX: GUY).
The company listed net income of $3.2 million, or 2 cents per share, compared to $12.1 million, or 7 cents, in the fiscal fourth quarter of 2019. The profit was also down from adjusted net income of $4.6 million, or 3 cents per share, in the fourth quarter of 2019 when excluding special items, such as an impairment reversal of $9.2 million recorded in the year-ago period.
The company said earnings during the January-March quarter were impacted when operations in China were suspended for a time due to COVID-19, as well as decreases of 3%, 26%, and 32% in the selling price of silver, lead and zinc, respectively. However, Silvercorp recorded a foreign-exchange gain of $5.4 million due to appreciation of the U.S. dollar against the Canadian dollar. Revenue of $18.9 million was down 46% from $35 million in the same period a year ago. Cash flow from operating activities fell to $6.3 million from $8.3 million.
During the fourth quarter ending March 31, the company sold 0.8 million ounces of silver and 500 ounces of gold, down from 1.3 million and 700 ounces in the same quarter a year earlier. Silvercorp also sold 9.7 million pounds of lead and 3.1 million pounds of zinc, down from 12.7 million and 7.3 million a year earlier.
The company said operations were ramped back up to full capacity in March, with no employee infections of COVID-19.
Despite COVID-19 shutdowns in the final quarter of its fiscal year, the company said it achieved its production target for the 12-month period that ended March 31. The company sold 6.3 million ounces of silver, down slightly from 6.4 million the year before. Gold sales of 3,300 ounces were down from 3,500. Sales of 65.3 million pounds of lead and 25.4 million pounds of zinc were up from 64.8 and 22.7 million pounds, respectively, in the prior fiscal year.
Net income for the full fiscal year was $34.3 million, or 2 cents per share, compared to $39.7 million, or 23 cents, in the prior year.