Sandfire shares down 6% after posting HY loss
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The news: Sandfire shares dropped more than 6% in morning trading after the copper and nickel miner doubled its half-year loss after tax compared to a year ago.
The numbers: Sandfire reported a loss after tax of USD53.1 million ($80.8 million) for the first half of the financial year — 96% worse than the prior corresponding period. Underlying earnings fell 88% to USD36.6 million while revenue dipped 3% to USD417.9 million.
Sandfire's CEO Brendan Harris said that earnings were hit as the company's Matsa copper mining complex in Spain, which it acquired for USD1.9 billion in 2021, primarily accounted for depreciation and amortisation of USD149.1 million and an underlying net finance expense of USD32.7 million.
Meanwhile, Sandfire said underlying group EBITDA of USD136.5 million, down $2.4 million, was only possible because of the commissioning and ramp-up of its newest mine, Motheo. The mine contributed USD49.6 million to group earnings in its first full six months of operation.
Sandfire shares were trading 6.2% lower at 12:15pm AEDT.
The context: The Perth-based miner reaffirmed full-year production, cost and capital expenditure guidance, and said it remained well positioned to deliver more than 50% growth in copper equivalent production from continuing operations by the end of FY25.
What they said: Jarden analysts said the net finance expense of USD32.7 million was a "big miss" compared to its consensus expectation of USD16 million.
"Sandfire have delivered a mixed result, in line with underlying EBITDA, which is consistent with our view that the financial result was largely de-risked by the delivery of a very strong December quarter production report," they said.
"With little contentious material in the financial report, apart from the net interest expense, we expect the market's focus to remain on operational developments — specifically the ramp up of the Motheo expansion and ongoing optimisation of Matsa, progress on de-gearing the balance sheet, and the pursuit of other potential growth initiatives."
The source: ASX announcement
