Centerra Gold (TSX: CG) delivered a second quarter carried by a stronger gold price and steady output, posting revenue of $442.7 million, up 54% from a year earlier.
Net earnings edged up just 5% to $72.1 million, or $0.37 a share, as one-off items weighed on the bottom line. With one-time items removed, adjusted net earnings rose 50% to $79.3 million, or $0.40 a share, while adjusted EBITDA climbed 81% to $157.5 million.
Cash generation told a more mixed story. Operating cash flow more than doubled to $66.2 million, but free cash flow landed at negative $23 million, a reversal from the $49 million of positive free cash flow the company reported in the first quarter. The shortfall traced largely to Öksüt, where Centerra made roughly $96 million in annual royalty and statutory tax payments during the period.
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Cash and equivalents fell to $450.9 million at quarter-end from $543.5 million three months earlier, though total liquidity of $850.9 million, which has since expanded to about $1.05 billion after a July increase to its credit facility, leaves the company plenty of room.
Centerra kept returning cash regardless, repurchasing 2.9 million shares for $49.7 million and lifting its full year buyback authorization to $200 million. A quarterly dividend of C$0.07 per share was also declared.
On the operational side, consolidated gold production rose 12% to 70,727 ounces, split between 38,175 ounces at Mount Milligan and 32,552 ounces at Öksüt. Copper output added 13.1 million pounds.
Öksüt’s performance was strong enough for the company to raise the mine’s full-year guidance to 120,000 to 135,000 ounces, nudging consolidated gold guidance up to 260,000 to 290,000 ounces. Copper guidance was left unchanged at 50 million to 60 million pounds.
Costs moved in different directions. Gold production cost of $1,456 an ounce came in below the guided range of $1,500 to $1,600, while all in sustaining costs of $1,707 sat near the top of guidance. Centerra realized an average gold price of $3,437 an ounce over the quarter.
The results extend a run that opened with a robust first quarter, when revenue jumped 62% and free cash flow ran comfortably positive. The second act was less tidy on cash, but production and shareholder returns both moved in the right direction.
Centerra Gold last traded at $22.70 on the TSX.
