Sotkamo Silver AB | Stock Exchange Release | February 14, 2025 at 09:00:00 EET
Sotkamo Silver AB, Q4/2024 Interim Report, 14 February 2025 at 9.00 (EET) / 08.00 (CET)
HIGHLIGHTS
October - December (Q4)
- Net sales decreased by 4% to 109 MSEK (113 MSEK*), driven mainly by lower silver, gold and lead production. The positive price development of silver, gold and zinc supported net sales.
- EBITDA decreased by 47% to 23 MSEK (43) and EBITDA margin decreased to 21% (39).
- EBIT decreased by 87% to 3 MSEK (25).
- Profitability decreased mainly due to higher volumes in underground operations, mainly drifting and support, and inflation surge which increased the cost of supplies and services by 20 MSEK.
- Cash and cash equivalents amounted to 88 MSEK (79).
- CAPEX was 24 MSEK (18) and consisted mainly of exploration and infill drilling, deepening the decline and CAPEX drifts.
- The production amounted to approximately 271,000 ounces of silver (409,000), 604 ounces of gold (902), 154 tonnes of lead (177), and 438 tonnes of zinc (287) in concentrates.
January - December
- Net sales increased by 1% to 412 MSEK (410 MSEK), driven mainly by the positive development of silver and gold prices.
- EBITDA decreased by 22% to 109 MSEK (140), EBITDA margin decreased to 26% (34). Profitability decreased mainly due to lower silver grade and increased cost of supplies and services.
- EBIT decreased to 32 MSEK (67).
- Cash and cash equivalents increased to 88 MSEK (79).
- CAPEX increased to 70 MSEK (46). The Company invested significantly in exploration drilling, aiming to extend the life of the mine and infill drilling that increases the predictability of production.
- The production was approximately 1,166,000 ounces of silver (1,411,000), 2,595 ounces of gold (3,048), 729 tonnes of lead (909), and 1,642 tonnes of zinc (1,857) in concentrates.
*Comparative figures refer to the corresponding period of the previous year.
In case of discrepancies, the official Swedish version of this report prevails.
OUTLOOK
Guidance for 2025
The Company has given (14 February 2025) the following guidance for 2025:
- The Company expects to produce 1.2 - 1.4 million ounces of silver
- Annual EBITDA margin to be at least 30%
- Net debt-to-EBITDA to be below 1.5 at year-end
The Company's profitability is significantly affected by external factors, such as metal prices and exchange rates and internal factors like uncertainties related to ore volumes and metal grades. The achievement of the guidance assumes that metal prices and EUR/USD rate stay approximately at the current level of the time when the guidance was published (14 February 2025).
CEO REVIEW
Net sales at last year's level despite temporary challenges in mining
The last quarter of the year started positively. Mining volumes increased to the planned level in October-November and the silver content in the ore increased as planned. We opened new mining levels with a higher silver content at a depth of 460-480 metres, and the measures taken to increase underground mining yielded results. The higher price of silver and the stronger dollar gave us reason to expect a quite positive development for the remainder of the year.
Unfortunately, the geotechnical risk associated with mining operations was realised in December and the stope in production did not proceed as planned in connection with the blasting due to weaker areas in the bedrock. Repairing the area safely took time, which affected the production volumes. However, the situation did not pose any risk to personnel or equipment. The company's key focus area in 2025 is to secure and strengthen its operational reliability. Among other things, we will open up alternative mining areas and accelerate the preparation of the stopes.
Due to the challenges in mining, silver production and profitability were slightly below expectations during the quarter. During the year, we produced 1.17 million ounces of silver, while the expectation in the autumn was still that we would reach more than 1.2 million ounces. Our EBITDA margin was 26.4%, while the expectation was over 28%. Despite significantly lower silver production volumes, our net sales for the quarter were on a par with last year as a result of the strengthened price of silver.
We made a significant step forward in our sustainability goals by achieving Level A in Towards Sustainable Mining (TSM) Finland's sustainable mining system. In addition, we started preparing for the Corporate Sustainability Reporting Directive (CSRD) by launching a dual materiality assessment of sustainability, which helps us to identify material sustainability themes in future reporting, as well as the development areas required for them.
Despite temporary production challenges, we expect a strong result for 2025. This is influenced by factors such as the favourable development of silver price and US dollar. However, production challenges will still affect the result for the beginning of the year.
KEY FIGURES
| Q4/24 | Q4/23 | Change, % | 1-12/24 | 1-12/23 | Change, % | |
| Net sales, MSEK | 109 | 113 | -4% | 412 | 410 | 1% |
| EBITDA, MSEK* | 23 | 43 | -47% | 109 | 140 | -22% |
| EBITDA margin % | 21.4 | 38.5 | -44% | 26.4 | 34.1 | -22% |
| EBIT, MSEK | 3 | 25 | -87% | 32 | 67 | -51% |
| EBIT margin % | 3.1 | 22.4 | -86% | 7.9 | 16.3 | -52% |
| Equity ratio %* | 41 | 43 | -3% | 41 | 43 | -3% |
| Cash liquidity %* | 75 | 101 | -26% | 75 | 101 | -26% |
| Net debt-to-EBITDA ratio* | 1.6 | 1.5 | 10% | 1.6 | 1.5 | 10% |
| Personnel at the end of the period | 51 | 47 | 9% | 51 | 47 | 9% |
| Silver production, koz* | 271 | 409 | -34% | 1,166 | 1,411 | -17% |
| Mill feed, kt* | 123 | 112 | 10% | 497 | 478 | 4% |
| Average silver grade, g/tonne* | 84 | 126 | -34% | 89 | 106 | -16% |
Alternative key performance measures are marked with asterisk. For more detailed definitions, please see the full report.
EVENTS AFTER THE REPORTING PERIOD
15 January 2025 Sotkamo Silver issued a profit warning, stating that silver production and EBITDA margin were somewhat lower than expected for 2024.
7 February 2025 the company released a significant milestone in its sustainability work. Sotkamo Silver's operations are strongly based on responsibility and locality. The company's sustainability performance is assessed using the industry specific Towards Sustainable Mining (TSM) Finland standard, in which the company achieved at least an A level in all areas of the standard, verified by an external evaluator in December 2024. Achieving level A requires commitment to principles and goals that promote responsible operations, implementation of action plans, reporting on them and communication.
FINANCIAL CALENDAR
- Financial Statements and the Board of Directors' Report for the Year 2024: Week commencing 31 March 2025
- Q1/2025: 29 April 2025
- Q2/2025: 31 July 2025
- Q3/2025: 23 October 2025
The Annual General Meeting is planned to be held on 24 April 2025 in Stockholm.
WEBINAR
The result webinar will be held today on 14 February at 1:00 p.m. Finnish time (EET). You can participate in the event through the link provided below: https://sotkamosilver.videosync.fi/q4-2024
The webinar will be conducted in Finnish, with the material presented in English. During the event, you can ask questions using the chat function. The presentation from the webinar will be made available on the company's website at: https://www.silver.fi/en/investors/presentations
Stockholm, 14 February 2025
Sotkamo Silver AB's Board of Directors and CEO
CONTACT INFORMATION
Mikko Jalasto,
CEO of Sotkamo Silver AB
mikko.jalasto@silver.fi
+358 50 482 1689
Tommi Talasterä,
CFO of Sotkamo Silver AB
tommi.talastera@silver.fi
+358 40 712 6970
This is information that Sotkamo Silver AB is obliged to make public pursuant to the EU Market Abuse Regulation.
This is a summary of Sotkamo Silver's Financial Statements report. The complete report is attached to this release and available at the Company webpage: https://www.silver.fi/en/investors
Sotkamo Silver in brief
Sotkamo Silver is a mining and ore prospecting company that develops and utilises mineral deposits in the Kainuu region in Finland. Sotkamo Silver supports the global development towards green transition technologies and produces the metals needed responsibly and by taking local stakeholders into account. Sotkamo Silver's main project is a silver mine located in Sotkamo, Finland. In addition to silver, the mine produces gold, zinc and lead. The company also has mining and ore prospecting rights for mineral deposits in the vicinity of the silver mine in Kainuu. Sotkamo Silver Group consists of the parent company Sotkamo Silver AB and its wholly-owned Finnish subsidiary (Sotkamo Silver Oy). Sotkamo Silver AB is listed at NGM Main Regulated in Stockholm (SOSI), Nasdaq Helsinki (SOSI1), and Börse Berlin.
Read more about Sotkamo Silver at www.silver.fi/en/
