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Fortuna Silver (FSM) Q2 Earnings Miss, Revenues Rise Y/Y

·4-min read

Fortuna Silver Mines Inc. FSM reported second-quarter 2022 adjusted earnings per share of 1 cent per share, which missed the Zacks Consensus Estimate of 7 cents. The bottom line marked an 86% slump from the year-ago quarter’s level. Results were impacted by lower sales at San Jose due to the declining silver prices and corresponding negative concentrate sales adjustments, and lower production. Higher G&A expenses also hurt earnings.

Including one-time items, Fortuna Silver reported earnings of 1 cent per share in the quarter under review compared with 9 cents in the year-ago quarter.

Fortuna Silver’s revenues improved 39% year over year to $167.5 million in the quarter under review. Consolidated realized prices were $1,870 per ounce and $22.62 per ounce for gold and silver respectively in the quarter.
 
All-In Sustaining Cost (AISC) per ounce of gold sold was $1,151 for the Lindero Mine and $1,565 for the Yaramoko Mine. AISC per silver equivalent ounce of payable silver sold came in at $15.41 and $18.19 for the San Jose Mine and Caylloma Mine, respectively.

Fortuna Silver Mines Inc. Price, Consensus and EPS Surprise

Fortuna Silver Mines Inc. Price, Consensus and EPS Surprise
Fortuna Silver Mines Inc. Price, Consensus and EPS Surprise

Fortuna Silver Mines Inc. price-consensus-eps-surprise-chart | Fortuna Silver Mines Inc. Quote

FSM reported a mine-operating profit of $32.5 million in the quarter under review, reflecting a year-over-year decline of 33%. Operating profit was $13.1 million, down 64% from $35.9 million in the prior-year quarter.

Adjusted EBITDA improved 5.5% year over year to $57.9 million in the second quarter of 2022. The adjusted EBITDA margin was 34.6% compared with 45.6% in the prior-year quarter.

Financial Position

Fortuna Silver ended the second quarter of 2022 with around $116 million of cash and cash equivalents compared with $107 million held at the end of last year’s comparable quarter. Total liquidity as of Jun 30, 2022, was $136.1 million. Net cash flow from operating activities was $47.4 million in the quarter compared with $29.5 million in the prior-year quarter.

Production Details

In the quarter under review, silver and gold production was recorded at 1,652,895 ounces and 62,171 ounces, respectively. Compared to last year’s production figures, gold production improved 100%, while silver output declined 13%. Gold equivalent production in the quarter stood at 96,7123 ounces.

Per management, Séguéla construction is 66% complete as of the end of June. It is on track for the first gold pour in mid-2023.

Price Performance

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Zacks Investment Research


Image Source: Zacks Investment Research

Shares of Fortuna Silver have fallen 37.6% in a year compared with the industry’s decline of 25.7%.

Zacks Rank & Stocks to Consider

Fortuna Silver currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are ATI Inc. ATI, Albemarle Corporation ALB and Ashland Global Holdings Inc. ASH.

ATI, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 1,069.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 12.5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

ATI’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of 128.9%, on average. ATI shares have surged 56% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Albemarle has a projected earnings growth rate of 247% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 7.8% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 20%. ALB has gained roughly 12% in a year and has a Zacks Rank of 1 at present.

Ashland, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 50.9% for fiscal 2022. The Zacks Consensus Estimate for ASH’s fiscal 2022 earnings has been revised 10.5% upward in the past 60 days.

ASH’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once. Ashland has a trailing four-quarter earnings surprise of 1.82%, on average. Its shares have been up around 23% in a year.


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Fortuna Silver Mines Inc. (FSM) : Free Stock Analysis Report
 
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