Sierra Metals more than triples net income despite production setback in first quarter
(Kitco News) - Sierra Metals (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) reported that the company’s Q1 2021 consolidated production includes 7.9 million pounds of copper, a 33% decrease; 1.0 million ounces of silver, a 1% increase; 24.1 million pounds of zinc, an 11% increase; 9.0 million pounds of lead, a 1% decrease; and 2,636 ounces of gold, a 28% decrease respectively, compared to Q1 2020 due to reduced mining of higher grade areas primarily due to restrictions resulting from COVID-19.
The company said that despite the decline in quantities of payable metals due to ongoing COVID-19 related operational challenges and external factors, the company generated higher revenues, adjusted EBITDA and operating cash flows during Q1 2021.
Revenue from metals payable of $69.6 million in Q1 2021 increased by 25% from $55.6 million in Q1 2020. The increase in revenues was largely driven by the increase in realized metal prices, which more than compensated for the decrease in metal payable, except zinc and lead.
Adjusted EBITDA of $25.3 million for Q1 2021 increased compared to $16.1 million in Q1 2020. The increase in adjusted EBITDA in Q1 2021 resulted from higher revenues and higher gross margins at all sites.
Net income attributable to shareholders for Q1 2021 was $3.1 million (Q1 2020: $(1.9) million) or $0.02 per share (basic and diluted) (Q1 2020: $(0.01). Adjusted net income attributable to shareholders of $4.4, or $0.03 per share, for Q1 2021 as compared to the adjusted net income of $1.2 million, or $0.01 per share for Q1 2020.
Cash flow generated from operations before movements in working capital of $25.6 million for Q1 2021 increased compared to $15.7 million in Q1 2020.
The company added that its operations were affected by the overall pandemic operational restriction. The company’s management continues to assess the situation but is maintaining its production guidance of between 155 million to 170 million Cu Eq pounds issued on January 18, 2021.
Sierra Metals is a diversified Canadian mining company focused on the production and development of precious and base metals from its polymetallic Yauricocha mine in Peru, and Bolivar and Cusi mines in Mexico.