Central Asia Metals plc (CAM) reported group profit before tax fell by 50% from non-cash impairment charge at its Sasa lead-zinc mine in North Macedonia.
FINANCES
The company’s full year results for the 12 months ended 31 December 2022 for Sasa and its Kounrad copper recovery plant in Kazakhstan showed pre-tax profit of $54.6 million (2021: $109.3m), due to the $55.1m charge related to Sasa.
Gross revenue decreased slightly to $232.2m (2021: $235.2m) and group 2022 EBITDA was $131.6m (2021: $141.5m).
The group fully repaid its corporate debt and as at 31 December 2022, drawn overdraft facilities totalled $1.4m (2021: $9.6m) resulting in net cash of $58.9m (2021: $22.7m).
Sasa’s 2022 EBITDA was $56.4 million (2021: $57.5 million) and Kounrad’s 2022 EBITDA was $94.9m (2021: $106.0m).
CAM’s 2022 net revenue after deductions was $220.9m (2021: $223.4m).
The group benefited from a foreign exchange gain of $6.8m (2021: $1.2m) and reduced finance costs of $2.1m (2021: $3.9m) from repayment of the corporate debt during the year.
As at 31 December 2022, the group had cash in the bank of $60.6m (2021: $59.2m) and current borrowings, comprising North Macedonian overdraft facilities, of $1.4m (2021: $33.0m).
CAM generated free cash flow of $89.7 million (2021: $103.8m), which the board will use to propose a final 10 pence dividend.
INCREASED COSTS
The company said that recent global inflation has adversely affected several key costs and salaries which increased the group cost base.
The first six months of 2022 saw strong metal prices and markets followed by worsening of conditions which also affected the CAM’s operations, including electricity prices in North Macedonia.
During the year, administrative expenses rose to $27.1m (2021: $22.1m) due to options exercised at a share price more than the fair value of the date of grant, staff pay increases, recruitment and an increase in business travel costs.
2023 OUTLOOK
Chief executive officer Nigel Robinson said that although CAM continued to foresee global challenges, the company expected to continue to perform “very well relatively” and will look for new opportunities.
“We were active throughout 2022 in terms of business development, having reviewed 40 opportunities, signed NDAs [non disclosure agreements] for 17 of them and conducted two site visits.
“This momentum has continued into 2023 and we remain in a very strong position from which to grow through acquisition, building the business for the future and producing the base metals essential for modern living.”
PRODUCTION GUIDANCE
Production guidance for Sasa is 790,000 to 810,000 tonnes of ore, and 19,000 to 21,000 tonnes of zinc in concentrate and 27,000 to 29,000 tonnes of lead in concentrate.
Kounrad production is expected to be 13,000 to 14,000 tonnes of copper.
The company also aims to generate its own renewable power on completion of the solar power plant during 2023.