Centamin, an Egypt-focused gold mining company, has reported a notable 25% increase in its annual profit for 2023, buoyed by the robust sales of gold at escalating market prices. The mining firm, listed on both the London and Toronto Stock Exchanges under the symbols LON: CEY and TSX: CEE respectively, has seen its financial metrics climb, with a 14% rise in profit, amounting to $195.1 million up from $171 million in the preceding year. This financial uplift is mirrored in the company’s revenue, which ascended by 13% to reach $891.3 million, compared to $788.4 million in 2022.
The source of this windfall is the company’s flagship Sukari mine in Egypt, its sole production site, which saw gold sales totaling 456,625 ounces. This marks a 4% increase from the 438,638 ounces recorded in 2022. The rise in gold sales was complemented by an 8.6% increase in realized prices for the precious metal, with prices per ounce reaching $1,948, up from $1,794. The broader market for bullion also experienced a significant uptick, with prices soaring by 15% in 2023 to conclude the year at a record high of $2,078.4 an ounce, according to data from the World Gold Council. The year’s average price stood at $1,940.54 an ounce, an 8% hike from 2022, marking the metal’s most successful year since 2020.
Centamin’s Chief Executive, Martin Horgan, underscored the operational strides made by the company, stating, “2023 was the third consecutive year that we have safely delivered on our production guidance, reflecting the operational improvements and flexibility from our three-year reinvestment plan.” Despite the financial success, Centamin announced a reduction in its shareholder payout to 2 US cents per share, down from the 2.5 US cents distributed in 2022, culminating in a total payout reduction of 20% from the previous year.
In terms of operational enhancements, Horgan highlighted significant progress at the Sukari mine. The company has strategically re-positioned Sukari, setting it on course to consistently produce 500,000 ounces annually. Moreover, Centamin anticipates operational expense reductions following the initiation of solar power generation capabilities.
The company also reported spending less than anticipated in the last year, with total capital expenditures tallying at $204 million, which fell below the projected $272 million. This reduction is attributed to cost-saving measures, a decrease in capitalization expenses, and adjustments to equipment rebuild schedules.
A noteworthy development in Centamin’s operational strategy is the commencement of a grid connection project, leveraged by recent enhancements to Egypt’s power distribution infrastructure. This project, complemented by the existing on-site solar power generation, is poised to slash diesel costs by $41 million annually. This initiative is part of Centamin’s broader commitment to environmental sustainability, targeting a 30% reduction in its Scope 1 and 2 emissions by 2030. These categories encompass emissions from mining operations and power consumption, respectively.
Looking ahead, Centamin has maintained its 2024 gold production guidance, projecting an output ranging between 470,000 to 500,000 ounces per annum. This steadfast outlook, combined with strategic operational improvements and a favorable market environment, positions Centamin as a resilient and forward-looking player in the gold mining industry. The company’s ability to navigate market fluctuations and operational challenges underscores its commitment to sustainable growth and value creation for stakeholders, even as it aims for significant environmental milestones in the near future.
