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Hochschild Mining PLC (GB:HOC)
LSE:HOC
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Hochschild Mining
(LSE:HOC)
68Neutral
Hochschild Mining (HOC) vs. S&P 500 (SPY)
Market Cap
£1.29B
Dividend YieldN/A
Average Volume (3M)2.56M
Price to Earnings (P/E)17.3
Beta (1Y)1.39
Revenue Growth31.84%
EPS GrowthN/A
CountryUK
Employees3,232
SectorBasic Materials
Sector Strength63
IndustryMining
Share Statistics
EPS (TTM)0.15
Shares Outstanding514,458,440
10 Day Avg. Volume3,467,292
30 Day Avg. Volume2,564,904
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.20
Price to Cash Flow (P/CF)8.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
261.43pPrice Target Upside1.72% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Hochschild Mining Business Overview & Revenue Model
Company DescriptionHochschild Mining (HOC) is a leading precious metals company headquartered in the United Kingdom, engaged in the exploration, mining, processing, and sale of silver and gold. Operating primarily in the Americas, the company runs several underground mines and is known for its expertise in narrow-vein underground mining, which allows it to effectively extract high-grade ores. Hochschild's core products include silver and gold bullion, which are sold to various customers in the market.
How the Company Makes MoneyHochschild Mining generates revenue through the exploration, extraction, and sale of precious metals, primarily silver and gold. The company's key revenue streams include the production and direct sale of these metals to the global market, where they are used in various industries, including electronics, jewelry, and investment. Hochschild achieves value by efficiently operating its mines, focusing on cost control and maximizing the output of high-quality ore. The company's earnings are also influenced by global precious metals prices, which can fluctuate based on market demand, geopolitical factors, and economic conditions. Additionally, Hochschild may engage in strategic partnerships or joint ventures to enhance its exploration capabilities and expand its resource base.
Hochschild Mining Financial Statement Overview
Summary
Hochschild Mining demonstrated strong revenue growth and operational efficiency in 2024. The balance sheet reflects stable leverage and improving equity, though historical fluctuations in profitability and cash flow are present. Despite positive cash flow growth, capital expenditures weigh on cash reserves.Income Statement
Hochschild Mining demonstrated strong revenue growth from 2023 to 2024, with a 36.6% increase, driven by the mining sector's improving conditions. The company improved its gross profit margin from 26.7% in 2023 to 36.1% in 2024, showcasing enhanced operational efficiency. However, the absence of EBIT and fluctuating net profitability, with a net profit margin rising to 10.2% in 2024 from a negative margin in 2023, indicates volatility in core earnings.75
Positive
Balance Sheet
The company maintains a reasonable debt-to-equity ratio of 0.52 in 2024, indicating balanced leverage. The equity ratio improved to 37.0%, reflecting a solid capital structure. However, the return on equity, which increased to 15.9% in 2024, signals improved profitability but also highlights past fluctuations due to inconsistent earnings.70
Positive
Cash Flow
Operating cash flow growth was robust, increasing to $321 million in 2024, supporting liquidity. The free cash flow turned positive in 2024, after being negative in the prior year, indicating improved cash generation. Nonetheless, significant capital expenditures continue to weigh on cash reserves, and the free cash flow to net income ratio remains modest.68
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 771.43M | 947.70M | 693.72M | 735.64M | 811.39M | 621.83M | Gross Profit |
| 265.47M | 342.43M | 185.50M | 208.00M | 299.80M | 195.07M | EBIT |
| 120.36M | 0.00 | -7.67M | 35.89M | 161.16M | 82.39M | EBITDA |
| 304.63M | 359.10M | 117.38M | 177.74M | 296.02M | 188.72M | Net Income Common Stockholders |
| 29.23M | 97.00M | -55.01M | 4.83M | 76.93M | 20.43M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 79.70M | 100.78M | 89.13M | 143.84M | 386.79M | 231.88M | Total Assets |
| 1.28B | 1.65B | 1.42B | 1.42B | 1.45B | 1.37B | Total Debt |
| 157.07M | 319.31M | 351.16M | 321.87M | 304.91M | 210.95M | Net Debt |
| 77.36M | 222.33M | 262.03M | 178.02M | -81.88M | -20.93M | Total Liabilities |
| 487.99M | 964.15M | 747.23M | 694.57M | 695.27M | 559.98M | Stockholders Equity |
| 719.29M | 610.87M | 608.46M | 657.24M | 695.55M | 726.53M |
| Cash Flow | Free Cash Flow | ||||
| -57.51M | 32.57M | -83.62M | -230.79M | 132.34M | 88.04M | Operating Cash Flow |
| 193.18M | 321.25M | 178.76M | 102.92M | 284.70M | 195.37M | Investing Cash Flow |
| -223.20M | -277.00M | -245.51M | -337.58M | -183.43M | -112.23M | Financing Cash Flow |
| 34.75M | -34.82M | 22.77M | -6.59M | 57.13M | -12.41M |
Hochschild Mining Technical Analysis
Positive
257.00
Price Trends
199.73
Positive
210.35
Positive
197.67
Positive
Market Momentum
15.90
Negative
78.92
Negative
98.32
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:HOC, the sentiment is Positive. The current price of 257 is above the 20-day moving average (MA) of 207.05, above the 50-day MA of 199.73, and above the 200-day MA of 197.67, indicating a bullish trend. The MACD of 15.90 indicates Negative momentum. The RSI at 78.92 is Negative, neither overbought nor oversold. The STOCH value of 98.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:HOC.
Hochschild Mining Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Performance Comparison
GB:HOC
Hochschild Mining
257.00
137.60
115.24%
FNLPF
FRESNILLO
11.91
6.04
102.90%
GB:SRB
Serabi Gold
146.00
83.50
133.60%
Hochschild Mining Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: 33.99% | Next Earnings Date: Aug 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted record-breaking results, significant resource additions, and successful debt reduction and dividend restoration. However, these were countered by cost increases, FX losses, and challenges in Argentina. Despite these challenges, the overall sentiment remains positive due to strong operational and financial achievements.Highlights
Record-Breaking Results
The company achieved the best results in 13 years, producing nearly 350,000 ounces of gold and nearly reaching $1 billion in revenue, with EBITDA increasing by 54%.
Significant Resource Addition
The company added 2.8 million ounces of resources, with notable additions in Inmaculada (1 million ounces) and Royropata (1.3 million ounces).
Debt Reduction and Dividend Restoration
The company reduced net debt by $40 million, finishing at $216 million, and reinstated dividends with a policy based on 20%-30% of free cash flow.
Strong Cash Generation
Inmaculada alone generated $192 million in cash, contributing to a strong cash position of $97 million.
M&A and Divestments
Executed acquisition of Monte do Carmo for $60 million and divested three non-core assets, receiving $60 million in cash.
ESG and Operational Efficiency
Maintained world-class ESG performance with a frequency rate of 1 for underground mines and implemented cost efficiency projects across operations.
Lowlights
Cost Increases
Costs increased by 19% due to increased production volume and inflation, particularly in Argentina.
FX Losses
Recorded foreign exchange losses mainly due to the devaluation of the Argentinian peso and Brazilian real.
Higher All-In Sustaining Costs
Reported slightly higher all-in sustaining costs due to a slower ramp-up in Mara Rosa and inflationary pressures.
Challenges in Argentina
Incurred a 33% effective tax rate and faced challenges in repatriating cash from Argentina.
Delay in Royropata Permit
The permit for Royropata is expected by 2027, due to the lengthy process of obtaining easements and government approvals.
Company Guidance
During the call discussing the fiscal year 2024 results, Eduardo Landin outlined the company's strategic focus on four pillars: brownfield development for long-term value and mine life extension, operational efficiency, enhanced ESG (Environmental, Social, and Governance) practices, and disciplined capital allocation. The company achieved its best results in 13 years, producing nearly 350,000 ounces of gold, generating revenues close to $1 billion, and increasing EBITDA by 54%. They also reduced their net debt to $216 million after repaying $40 million of debt, and reinstated their dividend policy. For 2025, the company forecasts production between 350,000 and 378,000 ounces, with the first full production year at Mara Rosa and key developments at Royropata and Monte do Carmo. They also aim to maintain strong ESG metrics and reduce costs through various initiatives. The company secured a new $300 million green loan and announced a dividend policy, aiming to pay 20% to 30% of free cash flow, with a minimum of $10 million annually. The call also addressed cost increases due to a 19% rise in production volume and inflationary pressures, while highlighting ongoing cost optimization projects and the potential for future growth through the development of core assets.Hochschild Mining Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Hochschild Mining Reports Record Financial Performance and Strategic Growth
Positive
Mar 12, 2025
Hochschild Mining PLC announced its strongest financial performance in 13 years, with significant increases in revenue, adjusted EBITDA, and profit before tax. The company is expanding its resources with record additions and developing major growth projects to boost production, while also restoring its dividend policy to enhance shareholder value. The company’s strategic advancements in Brazil and resource additions in Peru highlight its commitment to growth and sustainability, ensuring long-term value for stakeholders.
M&A TransactionsBusiness Operations and Strategy
Hochschild Mining Sells Arcata and Azuca to Focus on Core Assets
Positive
Mar 5, 2025
Hochschild Mining PLC has completed the sale of its former Arcata mine and the Azuca project to Sierra Caraz S.A.C. as part of its strategy to focus on core assets in Peru, Brazil, and Argentina. This move allows Hochschild to concentrate on its primary operations, potentially strengthening its market position and operational efficiency in the precious metals industry.
Executive/Board Changes
Hochschild Mining Announces Board Changes and New Director Appointment
Positive
Jan 24, 2025
Hochschild Mining PLC has announced the appointment of Andrew Wray as an independent Non-Executive Director, effective after the Annual General Meeting in June 2025. Wray brings extensive experience from various senior roles in the resource sector, including leadership positions at Golden Star Resources and La Mancha, which is expected to bolster the company’s strategic objectives. The company also highlighted upcoming changes in board roles, with Jill Gardiner and Tracey Kerr assuming key positions, marking a significant milestone as women will hold the Senior Independent Director and key chair positions for the first time.
Business Operations and StrategyFinancial Disclosures
Hochschild Mining Achieves 2024 Production Targets and Expands Growth Opportunities
Positive
Jan 22, 2025
Hochschild Mining reported strong operational performance for 2024, meeting its production guidance with significant contributions from the Mara Rosa mine and better-than-expected results from Inmaculada. The acquisition of the Monte do Carmo project in Brazil promises low-cost growth opportunities, while the company’s brownfield exploration efforts are set to add substantial resources. Financially, Hochschild improved its cash position and reduced net debt, enhancing its financial flexibility. Challenges such as higher inflation in Argentina and a slower ramp-up at Mara Rosa led to higher-than-expected all-in sustaining costs, but the company remains optimistic about its 2025 production targets and ongoing growth strategy.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.