Gold Miner Centamin Declares Higher Dividend, Shares Rise

Gold miner Centamin Plc reported a disappointing 29 percent fall in full-year core profit, but declared a higher-than-expected dividend which sent its stock soaring 15 percent on Monday morning.

The miner, which said its profit was hurt by falling gold prices, added that its policy was to return about 15-30 percent of its free cash flow to shareholders.

Centamin, which operates the Sukari mine in Egypt, announced a final dividend of 1.99 cents per share, taking its total dividend to 2.86 cents.

Analysts on average expected a dividend of 1.6 cents per share, according to Thomson Reuters I/B/E/S.

Investec analysts said the dividend was a significant positive and highlighted the company’s confidence in ongoing cashflow.

Traders also said the outlook for dividends was behind the stock’s chunky gains.

The miner said it would suspend capital expenditure on expansion and project development this year.
Centamin shares were up 15.6 percent at 62.15 pence at 0943 GMT, making them the top gainer on the FTSE Mid 250 Index .

The company said its earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $165.4 million from $234.2 million a year earlier.

Centamin said the average gold price it realised fell to $1,257 per ounce from $1,384 a year earlier, more than offsetting a 3 percent increase in the number of ounces it sold.

Gold prices fell almost 2 percent in 2014 to as low as $1,131.85 an ounce, after falling 28 percent in 2013.

Analysts on average were expecting EBITDA of $173.5 million, according to Thomson Reuters I/B/E/S.

Source: Reuters