SMTS - Sierra Metals (SMTS) - Unexpected 2Q Loss; Anticipate a Stronger Second Half

Second quarter financial results. Sierra Metals reported an adjusted net loss of $11.6 million, or $(0.07) per share, compared with net income of $5.9 million, or $0.04 per share, during the prior quarter. We had forecast net income of $5.2 million, or $0.03 per share. Adjusted EBITDA amounted to $1.4 million compared to $16.0 million during the prior quarter. Second quarter financial results reflected lower metal prices and margin, along with an $11.0 million mark-to-market adjustment to unsettled open sales positions at the end of the second quarter due to the decline in metal prices toward the end of the second quarter. Revenue from metals payable decreased to $49.9 million compared to $57.2 million during the first quarter of 2022.Adjusting estimates. Sierra lowered its 2022 production guidance and now expects to produce between 70.0 million and 78.0 million copper equivalent pounds compared with prior guidance of 79.5 million to 89.7 million pounds. The revised forecast reflects a slower operational turn-around at the Bolivar mine and the impact of underground flooding at the Cusi mine during the second quarter. EBITDA is now expected to be in the range of $61.0 million to $67.0 million compared to prior guidance of $90.0 million to $105.0 million. We have lowered our full year 2022 EPS and EBITDA estimates to $0.06 and $63.9 million from $0.18 and $89.1 million, respectively. Read More >>