Hochschild Mining dividend misses estimates despite record earnings; stock down

Investing.com -- Hochschild Mining declared a final dividend below analyst estimates on Wednesday despite reporting record adjusted earnings for 2025, sending shares in the London-listed precious metals miner down more than 6%.

The company declared a final dividend of 5 U.S. cents per share, missing a Visible Alpha consensus estimate of 5.45 cents and an RBC Capital Markets forecast of 5.15 cents. The payout represents 22% of attributable free cash flow, at the low end of its stated 20%-30% policy.

Adjusted EBITDA rose 39% to $583.7 million for the full year ended Dec. 31, 2025, as a 37% rise in average gold prices offset a 9% fall in attributable production. 

Revenue climbed 25% to $1.18 billion. Net debt fell to $22.7 million from $215.6 million a year earlier.

Net profit before exceptional items rose 50% to $200.7 million but came in 9% below RBC’s estimate, with the difference attributed to non-cash hedging losses. 

The company recorded $86 million in realised hedge losses after locking in gold forward contracts at between $2,117 and $2,206 per ounce. Derivative financial liabilities stood at $276.7 million at year-end.

The company’s Mara Rosa open-pit mine in Brazil was the primary drag on results, producing 40,062 gold equivalent ounces, down 37% from 2024, at an all-in sustaining cost of $3,697 per ounce against a group average of $2,138. 

The plant was suspended for approximately one month mid-year for maintenance following the resignation of the chief operating officer in May, with Chief Executive Eduardo Landin assuming direct operational oversight.

"At Mara Rosa, we are close to completing our turnaround plan, positioning the operation for a stronger and more sustainable future," Landin said.

Group all-in sustaining costs came in at $2,138 per gold equivalent ounce, above original guidance of $1,980-$2,080. Hochschild reiterated 2026 production guidance of 300,000-328,000 gold equivalent ounces at $2,157-$2,320 per ounce.

The company added 1.7 million gold equivalent ounces to its resource base, with material additions at the Royropata silver project in Peru. A final investment decision on the Monte do Carmo project in Brazil is targeted for mid-2026.

The final dividend is payable June 16 to shareholders on the register as of May 8.