Dynacor Reports Sales of $46.0 Million and a Quarterly Net Income of $0.8 Million in Q3-2022 (US$0.02 or CA$0.03 Per Share) With a Solid Cash in Hand of $31.0 Million
Dynacor Group reported Q3-2022 financial results with sales of $46.0 million and net income of $0.8 million ($0.02 per share), down from $61.9 million and $3.5 million ($0.09 per share) in Q3-2021. This reflects a 23.3% decrease in gold ounces sold due to lower ore grades and market gold prices. However, ore processed increased by 3.1% to 37,410 tonnes. The gross operating margin fell to $4.5 million (9.8% of sales). Dynacor continues to maintain a strong cash position of $31.0 million.
- Increased ore processed by 3.1% to 37,410 tonnes.
- Strong cash position of $31.0 million at the end of Q3-2022.
- Net income decreased by 77.6% to $0.8 million from $3.5 million in Q3-2021.
- Sales dropped by 25.5% compared to Q3-2021, primarily due to lower gold production.
- Gross operating margin declined to $4.5 million (9.8% of sales) from $7.9 million (12.7% of sales) in the previous year.
- EBITDA decreased to $3.8 million from $7.2 million in Q3-2021.
MONTREAL, Nov. 14, 2022 (GLOBE NEWSWIRE) -- Dynacor Group Inc. (TSX: DNG) (Dynacor or the Corporation) released its unaudited condensed interim consolidated financial statements and the management's discussion and analysis (MD&A) for the third quarter ended September 30, 2022.
These documents have been filed electronically with SEDAR at www.sedar.com and will be available on the Corporation's website www.dynacor.com.
(All figures in this press release are in Ms of US$ unless stated otherwise. All amounts per share are in US$. All variance % are calculated from rounded figures. Some additions might be incorrect due to rounding).
Q3-2022 OVERVIEW AND HIGHLIGHTS
OVERVIEW
Dynacor completed the three-month period ended September 30, 2022 (“Q3-2022”) with quarterly sales of
While the plant continued operating at its 430 tpd capacity, the ore volume processed increased by
Q3-2021 beneficiated as well from the
HIGHLIGHTS
Operational
- Higher volume processed. The plant processed a volume of 37,410 tonnes of ore (407 tpd average) compared to 36,281 tonnes in Q3-2021 (394 tpd), a
3.1% increase; - Reduced gold production. In Q3-2022, gold equivalent production amounted to 27,252 AuEq ounces compared to 31,889 AuEq ounces in Q3-2021 a
14.5% decrease; - Increase ore inventories during the quarter. At the end of Q3, ore inventories amounted to over 9,000 tons of ore representing over 20 days of production.
Financial
- Solid cash position. Cash on hand remained solid at
$31.0 million at the end of Q3-2022 compared to$27.1 million at year end 2021 due to the cash generated by operating activities; - Decreased sales compared to Q3-2021. Due to lower volume produced and sold and lower average gold market price, sales amounted to
$46.0 million in Q3-2022 compared to$61.9 million in Q3-2021; - Decreased in gross operating margin. Gross operating margin of
$4.5 million (9.8% of sales) in Q3-2022, compared to$7.9 million (12.7% of sales) in Q3-2021 due to lower volume sold and decreasing gold prices during the period compared to an increasing trend in the comparative period; - Reduced operating income. Operating income of
$3.2 million in Q3-2022 compared to$6.6 million in Q3-2021 due to the decrease in the gross margin; - Earning per share affected by reduced gross margin and increased tax expense. Dynacor recorded a net income of
$0.8 million in Q3-2022 ($0.02 or CA$0.03 per share) compared to$3.5 million ($0.09 or CA$0.12 per share) in Q3-2021; - Decreased cash gross operating margin per AuEq ounce. Cash gross operating margin of
$197 per AuEq ounce sold (1) compared to$242 in Q3-2021; - Decreased EBITDA. EBITDA (2) of
$3.8 million , compared to$7.2 million in Q3-2021; - Decreased cash flows. Cash flows from operating activities before change in working capital items of
$2.0 million ($0.05 per share) (3) compared to$4.4 million ($0.11 per share) in Q3-2021.
Return to Shareholders
- Share buy-back. 213,655 common shares repurchased for
$0.5 million (CA$0.6 million ) in Q3-2022, compared to 59,914 common shares for$0.1 million (CA$0.2 million ) in Q3-2021; - Increased dividends. Continuation of monthly dividend payments which had been increased by
25% at the start of 2022 to CA$0.10 per share per year which represented a3.2% dividend yield based on the beginning of 2022 share price or3.9% based on the share price at the end of Q3-2022.
(1) Cash gross operating margin per AuEq ounce is in US$ and is calculated by subtracting the average cash cost of sale per equivalent ounces of Au from the average selling price per equivalent ounces of Au and is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another company.
(2) EBITDA: “Earnings before interest, taxes and depreciation” is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another corporation. The Corporation uses this non-IFRS measure as an indicator of the cash generated by the operations and allows investor to compare the profitability of the Corporation with others by canceling effects of different assets basis, effects due to different tax structures as well as the effects of different capital structures.
(3) Cash-flow per share is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another corporation. The Corporation uses this non-IFRS measure which can also be helpful to investors as it provides a result which can be compared with the Corporation market share price.
RESULTS FROM OPERATIONS
Unaudited Consolidated Statement of net income and comprehensive income
Three-month periods ended September 30, | Nine-month periods ended September 30, | ||||||
(in $'000) (unaudited) | 2022 | 2021 | 2022 | 2021 | |||
Sales | 45,998 | 61,941 | 150,022 | 145,627 | |||
Cost of sales | (41,485) | (54,075) | (131,699) | (125,941) | |||
Gross operating margin | 4,513 | 7,866 | 18,323 | 19,686 | |||
General and administrative expenses | (1,229) | (1,224) | (4,382) | (4,434) | |||
Other project expenses | (104) | - | (209) | (16) | |||
Operating income | 3,180 | 6,642 | 13,732 | 15,236 | |||
Financial income and expenses | 64 | (77) | (24) | (185) | |||
Foreign exchange loss | (127) | (80) | (210) | (371) | |||
Income before income taxes | 3,117 | 6,485 | 13,498 | 14,680 | |||
Current income tax expense | (1,984) | (2,695) | (5,308) | (6,084) | |||
Deferred income tax (expense) recovery | (332) | (272) | 313 | (810) | |||
Net income and comprehensive income | 801 | 3,518 | 8,503 | 7,786 | |||
Earnings per share | |||||||
Basic | $0.02 | $0.22 | |||||
Diluted | $0.02 | $0.21 | |||||
Total sales amounted to
Cumulative nine-months sales increased by
The Q3-2022 gross operating margin amounted to
General and administrative expenses amounted to
The Q3-2022 net income was also affected by the recording of a
Reconciliation of non-IFRS measures
(in $'000) (unaudited) | Three-month periods ended September 30, | Nine-month periods ended September 30, | |||||
2022 | 2021 | 2022 | 2021 | ||||
Reconciliation of net income and comprehensive income to EBITDA | |||||||
Net income and comprehensive income | 801 | 3,518 | 8,503 | 7,786 | |||
Income tax expenses (current and deferred) | 2,316 | 2,968 | 4,995 | 6,894 | |||
Financial expenses | (64) | 77 | 24 | 185 | |||
Depreciation | 799 | 666 | 2,269 | 1,957 | |||
EBITDA | 3,852 | 7,229 | 15,791 | 16,822 | |||
CONSOLIDATED CASH FLOW FROM OPERATING, INVESTING AND FINANCING ACTIVITIES AND WORKING CAPITAL AND LIQUIDITY
Operating activities
During Q3-2022, the cash flow from operations, before changes in working capital items, amounted to
During Q3-2022, total cash from operating activities amounted to -
Investing activities
During the three-month period ended September 30, 2022, the Corporation invested
Financing activities
In Q3-2022, monthly dividends totaling CA
In Q3-2022, 213,655 common shares were repurchased under the Corporation normal course issuer bid share buyback program for a total cash consideration of
In Q3-2022, the Corporation issued 21,250 common shares following the exercise of purchase options for a consideration of
Working capital and liquidity
As at September 30, 2022, the Corporation’s working capital increased to
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at September 30, 2022, total assets amounted to
(in $'000) (unaudited) | As at September 30, | As at December 31, |
2022 | 2021 | |
Cash | 31,039 | 27,099 |
Accounts receivable | 9,396 | 8,407 |
Inventories | 12,240 | 14,764 |
Property, plant and equipment | 21,124 | 20,759 |
Right-of-use assets | 253 | 341 |
Exploration and evaluation assets | 18,538 | 18,516 |
Other assets | 1,648 | 1,471 |
Total assets | 94,238 | 91,357 |
Trade and other payables | 11,218 | 11,680 |
Asset retirement obligations | 3,494 | 3,553 |
Current tax liabilities | 160 | 2,217 |
Deferred tax liabilities | 1,242 | 1,555 |
Lease liabilities | 240 | 343 |
Shareholders' equity | 77,884 | 72,009 |
Total liabilities and equity | 94,238 | 91,357 |
FOLLOW-UP OUTLOOK 2022
Ore processing
The decline in ore grades and recent gold prices impacted on the quarter sales.
For 2022, the Corporation maintains its forecasted sales in the range of
The Corporation is continuing to assess other opportunities of growth in Peru as well as in other jurisdictions.
(1) Using opening 2022 market gold price of
ABOUT DYNACOR
Dynacor is a dividend-paying industrial gold ore processor headquartered in Montreal, Canada. The corporation is engaged in gold production through the processing of ore purchased from the ASM (artisanal and small-scale mining) industry. At present, Dynacor operates in Peru, where its management and processing teams have decades of experience working with ASM miners. It also owns a gold exploration property (Tumipampa) in the Apurimac department.
The corporation intends to expand its processing operations in other jurisdictions as well.
Dynacor produces environmental and socially responsible gold through its PX IMPACT® gold program. A growing number of supportive firms from the fine luxury jewelry, watchmakers and investment sectors pay a small premium to our customer and strategic partner for this PX IMPACT® gold. The premium provides direct investment to develop health and education projects for our artisanal and small-scale miner’s communities.
Dynacor is listed on the Toronto Stock Exchange (DNG).
FORWARD-LOOKING INFORMATION
Certain statements in the preceding may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, or achievements of Dynacor, or industry results, to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statements. These statements reflect management’s current expectations regarding future events and operating performance as of the date of this news release.
Shares Outstanding: 38,572,507
Website: http://www.dynacor.com
Twitter: http://twitter.com/DynacorGold
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FAQ
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