Stillwater Mining Upbeat On Quarter Four Earnings Results

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Feb 24, 2015

Montana based mining company Stillwater Mining Company (SWC, Financial) on Feb. 20, 2015 declared the results for the fourth quarter of 2014 ended on December 31, beating profit forecast by reporting $14.7 million in net income. This comes as a pleasant surprise to many as Stillwater had reported a loss for the same period last year. The company has been putting up a brave front amidst volatile global situations which directly and indirectly affect the mining operations, especially the likes of geopolitical issues of Russia and some other regions.

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Vital stats for the Quarter Four of 2014

The total revenue figure for the quarter stood at $222.2 million. The company reported a consolidated net income of $14.7 million which translates to a profit of 12 cents per share and earnings adjusted for non-recurring costs of 14 cents per share. This beats the Wall Street earning expectations of 10 cents per share. The company reported an increase of cash and cash equivalents along with highly liquid investments to the tune of $22.7 million for the quarter. The All-in Sustaining Cost (ASIC) continued improved to $725 per mined ounce of palladium and platinum.

Some non-financial figures

The company mined palladium and platinum production of 137,600 ounces and processed 115,900 ounces of recycled palladium, platinum and rhodium

Vital stats for the Year 2014

Stillwater reported a total income of $943.6 million and net income of $70.3 million for the entire year. It generated net cash and highly liquid investments worth $65.5 million during the year prior to paying off $30.0 million of outstanding 8% debt. The All-in Sustaining Cost (ASIC) averaged at $784 per mined ounce of palladium and platinum which is at the lower end of the guidance range. Corporate overhead and exploration expenses stood at $37.8 million which is a 35% decrease year over year. The company retired $30.0 million worth of state of Montana exempt facility bonds. By the end of 2014 Stillwater balance sheet reflected $531.5 million in available cash reserves and investments.

Some non-financial figures

The company mined 517,700 ounces of palladium and platinum produce last year. The figure stands at mid-point of the guidance range. A total of 496,400 ounces of recycled palladium, platinum and rhodium was processed during the year.

Guidance figures for 2015

Stillwater has targeted for 520,000 to 535,000 ounces of palladium and platinum product for this year and it translates in to the cost per mined ounce (net of by-product and recycling credits) of $480 to $520. The company projects the exploration figure to be somewhere between $4 and $6 million. It expects the sustaining capital expenditure and project capital expenditure figures to be in the band of $83 to $88 million and $42 to $47 million respectively.

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About the stock

Stillwater’s stocks have declined by nearly 3% since the beginning of the year and the stock has increased by 8% during the same period. The stock is currently trading in the price band of $12 to $15. In the middle of 2014, the stock had surpassed $19 mark which means that there is a good potential for the prices to go up.

Key takeaway

The company is very hopeful that the hard work it has put in rebuilding the production, balance sheet and investor confidence in 2014 has brushed off the positive effects in initial period of 2015. Stillwater management is hopeful that it will continue to work towards improving the numbers and reap the results. The guidance figures of 2015 provide a glimpse into the company’s resolve to continue churning out profitable numbers. Hence the investment advisory would stands at "Buy" and "Hold."