Fortuna Silver (FSM) Q4 Earnings In Line With Estimates, Dip Y/Y

·3 min read

Fortuna Silver Mines Inc. FSM reported fourth-quarter 2022 adjusted earnings per share of 2 cents, which came in line with the Zacks Consensus Estimate. The bottom line however marked an 80% slump from the year-ago quarter’s figure. Results were impacted by lower sales volume and lower average silver price as well as increased cash costs across operations owing to the current inflationary trends.

Including one-time items, Fortuna Silver reported a loss of 52 cents per share in the quarter under review compared with earnings per share of 5 cents in the year-ago quarter.

Fortuna Silver’s revenues declined 17% year over year to $165 million in the quarter under review. The decline was attributed to reduced sales volume at Lindero, San Jose and Yaramoko, and lower silver and gold prices.

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

All-In Sustaining Cost (AISC) per ounce of gold sold was $1,221 for the Lindero Mine and $1,829 for the Yaramoko Mine. AISC per silver equivalent ounce of payable silver sold came in at $15.53 and $20.30 for the San Jose Mine and Caylloma Mine, respectively.

FSM reported a mine-operating profit of $26 million in the quarter under review, reflecting a year-over-year decline of 55%. The operating loss was $173 million compared with an operating loss of $38.9 million in the prior-year quarter.

Adjusted EBITDA slumped 38% year over year to $55.8 million in the fourth quarter of 2022 owing to lower sales and elevated operating costs. The adjusted EBITDA margin was 33.8% compared with 45% in the prior-year quarter.

Financial Position

Fortuna Silver ended 2022 with around $80.5 million of cash and cash equivalents compared with $107 million held at the end of 2021. Total liquidity as of Dec 31, 2022, was $150.5 million. Net cash flow from operating activities was $194 million in 2022 compared with $147 million in 2021.

Production Details

In 2022, silver and gold production was recorded at 6,907,275 ounces and 259,427 ounces, respectively. Gold equivalent production in 2022 was 401,878 ounces.

Per management, Séguéla construction is 93% complete as of the end of Feb 2023. It remains on track for the first gold pour in mid-2023.

2022 Results

FSM reported adjusted earnings per share of 15 cents in 2022. Including one-time items, the company reported a loss of 44 cents per share compared with earnings per share of 24 cents in 2021. Revenues were up 14% year over year to $681.5 million in 2022.

Price Performance

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Shares of Fortuna Silver have fallen 23% in a year compared with the industry’s 33.2% decline.

Zacks Rank & Other Stocks to Consider

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.

Some other top-ranked stocks in the basic materials space are Steel Dynamics Inc. STLD, Olympic Steel Inc. ZEUS and Nucor Corporation NUE.

Steel Dynamics currently sports a Zacks Rank of 1. STLD’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3% on average. STLD has rallied around 26% in a year.

Olympic Steel currently sports a Zacks Rank of 1. ZEUS’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 26.2% on average. ZEUS has rallied around 38% in a year.

Nucor currently carries a Zacks Rank of 1. NUE’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 7.7% on average. NUE has gained around 7% in a year.





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