Fortuna Silver (FSM) Q1 Earnings Top Estimates, Revenues Up Y/Y

Fortuna Silver Mines Inc. FSM reported first-quarter 2024 adjusted earnings per share of 9 cents, which beat the Zacks Consensus Estimate of 3 cents by a solid margin of 200%. The bottom line also marked an 80% improvement year over year. Results were aided by higher gold sales volume and improved gold prices.

Including one-time items, Fortuna Silver reported earnings of 4 cents per share in the first quarter of 2023.

Fortuna Silver’s revenues increased 28% year over year to $225 million on higher gold sales volumes and prices.

Gold equivalent production increased 19.6% year over year to 112,543 ounces. Fortuna Silver produced 89,678 ounces of gold, 49% higher than the year-ago quarter. Silver production plunged 32% to 1,074,571 ounces.

The improvement in gold sales volume was mainly attributed to the contribution of Séguéla, which had been under construction in the last year's comparable quarter. This was partially offset by lower output at San Jose as the mine exhausted its mineral reserves.

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

Realized gold price was $2,087 per ounce, 10% higher than $1,893 per ounce in the year-ago quarter. Realized silver prices rose 4% year over year to $23.40 per ounce.

All-In Sustaining Cost per gold equivalent ounce was $1,495, down 1.3% compared with $1,514 recorded in the year-ago quarter. Lower cash costs were offset by higher sustaining capital expenditures primarily at Lindero due to the construction of the heap leach pad expansion, increased brownfields exploration at Séguéla to advance identified prospects and higher royalties in the period due to increased production, metal prices and a change of the royalty regime in Burkina Faso.

Consolidated cash costs per ounce of gold equivalent sold was $879, which was 4% lower than $916 in the first quarter of 2023. The decline was mainly attributed to the contribution of low-cost production from Séguéla and the lower cost of sales per ounce of gold at Yaramoko related to higher grades. This was partially offset by higher cash costs per gold equivalent ounce at San Jose as previously capitalized costs are now being expensed as the mine is in its last year of operations. FSM also reported higher cash cost per gold ounce at Lindero related mainly to lower planned head grades in 2024.

FSM reported a mine-operating profit of $69.9 million, reflecting year-over-year growth of 73%. The company reported an operating income of $47.1 million compared with $23.9 million in the year-ago quarter.

Adjusted EBITDA rose 46% year over year to $95 million in the first quarter. The adjusted EBITDA margin was 42.3% compared with 37.2% in the year-ago quarter. The improvement was mainly aided by contributions from the Seguela mine.

Cash Position

Fortuna Silver ended the first quarter with around $88 million of cash and cash equivalents compared with $128 million held at the end of the year-ago quarter. Net cash flow from operating activities was $48.9 million compared with $41.8 million in the first quarter of 2023.
Net liquidity as of Mar 31, 2024, was $212.7 million.

Price Performance

Shares of Fortuna Silver have gained 48.8% in a year against the industry’s 31.5% decline.

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Zacks Rank

Fortuna Silver currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did FSM’s Peers Fare in Q1?

Endeavour Silver EXK reported break-even earnings per share in the first quarter compared with 2 cents reported in the first quarter of 2023. Revenues were up 15% year over year to $63.7 million aided by higher realized prices.

Endeavour Silver reported a 10% decline in silver production at 1.46 million ounces. Gold production increased 8% year over year to 10,133 ounces.

Hecla Mining HL reported earnings per share of 1 cent in the first quarter, beating the Zacks Consensus Estimate of a loss of 2 cents per share. The bottom-line figure was in line with the year-ago quarter.

Hecla Mining witnessed a 5% decline in revenues to $189.5 million, which missed the consensus estimate of $190 million. Hecla Mining produced 4.2 million ounces of silver, higher than the 4 million produced in the first quarter of 2023.

First Majestic Silver AG reported a loss of 6 cents per share in the first quarter against break-even earnings per share in the year-ago quarter. The Zacks Consensus Estimate was at a loss of 3 cents per share.

The company reported revenues of $106.0 million, which were down 32.5% from $157.0 million in the first quarter of 2023. The decrease in revenues was mainly driven by the temporary suspension of mining activities at the Jerritt Canyon Gold Mine in March 2023. First Majestic produced 5.2 million silver equivalent ounces, which consisted of 2.0 million silver ounces and 35,936 gold ounces.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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