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Silver Wheaton shares rise as Q4 results beat, announces first dividend for 2013

Published: 11:06 22 Mar 2013 EDT

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Shares of Silver Wheaton (TSE:SLW) (NYSE:SLW) were on the rise Friday, after the company posted “record” fourth quarter results that topped analyst views and prompted it to announce its first quarterly dividend for 2013 of 14 cents per share.

Shares of the company were up 2.9 per cent as at about 11 a.m. EDT, trading at $32.61.

For the quarter that ended December 31, the silver streaming company posted net earnings of $177.7 million or 50 cents per share, up 23 per cent from $144.7 million or 41 cents per share, a year earlier.

Meanwhile, cash flow from operations was $254.0 million or 72 cents per share, compared with $163.7 million or 46 cents per share for the same period in 2011 - an increase of 55 per cent.

Silver Wheaton said the increase in net earnings and operating cash flows is primarily attributable to the increase in the amount of gold and silver sold in the quarter.

Revenue was $287.2 million, on silver equiValent sales of 9.1 million ounces, or 7.3 million ounces of silver and 33,000 ounces of gold. The company noted that revenue rose 50 per cent year-over-year, as a result of a comparable increase in the number of ounces sold with “relatively unchanged” gold and silver prices.

Analysts polled by Thomson Reuters expected per share earnings of 47 cents on revenues of $265.24 million.

"2012 was another exceptional year for Silver Wheaton, anchored by a fourth quarter that saw record production, sales, revenue, net income, and cash flow for the company," said president and CEO Randy Smallwood. 

"With the addition of production from Hudbay's 777 mine midway through the year, plus growing production from Peñasquito, San Dimas and Zinkgruvan, 2012 production exceeded our forecast by over one and a half million ounces."

Silver Wheaton said fourth quarter silver equiValent production was 8.5 million ounces, up 22 per cent from 6.9 million ounces in the year-ago period.

Silver equiValent sales of 9.1 million ounces rose 53 per cent from sales of 6.0 million ounces, a year earlier.

Cash operating margin of $26.76 per silver equiValent ounce fell five per cent from $28.06 in the year-ago period, while average cash costs rose 16 per cent to $4.70 per silver equiValent ounce, compared to $4.06 per silver equiValent ounce in the year-ago quarter.

Silver Wheaton said the increase was driven by higher costs associated with silver and gold from its Hudbay 777 mine of $5.90 and $400 per ounce of silver and gold, respectively.

In 2013, the company anticipates a year-over-year increase in production of 13 per cent, to 33.5 million silver equiValent ounces, including 145 thousand ounces of gold.

Earlier this week, the company announced that attributable silver and gold reserves increased to 851.4 million ounces and 4.96 million ounces, respectively, as a result of organic and acquisition growth, inclusive of the acquisition of gold streams from Vale's (NYSE:VALE) Salobo and Sudbury mines.  

Based on reserve estimates as at December 31, following the Vale transaction, Silver Wheaton said silver equiValent reserves had grown to 1.12 billion ounces.

 

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