Insights

Sandfire share price shoots 12% higher on ‘transformational’ quarter

Sandfire’s transformation is delivering results…
The post Sandfire share price shoots 12% higher on ‘transformational’ quarter appeared first on The Motley Fool Australia. –

The Sandfire Resources Ltd (ASX: SFR) share price has been among the best performers on the ASX 200 on Thursday.

In afternoon trade, the copper producer’s shares are up 12% to $5.84 following the release of its quarterly update.

Sandfire share price jumps on strong quarterly update

Copper production of 28,774 tonnes
Zinc production of 16,027 tonnes
Gold production of 6,956 ounces
C1 cost of US$1.17 per pound
Quarterly sales revenue of US$343.1 million
Quarterly earnings before interest, tax, depreciation and amortisation (EBITDA) of US$186.9 million

What happened during the quarter?

For the three months ended 31 March, Sandfire reported sales revenue of US$343.1 million and EBITDA of US$186.9 million. This was underpinned by a significant jump in copper production thanks to the transformational acquisition of MATSA, which it took control of on 1 February. This acquisition contributed operating EBITDA of US$98.6 million during the quarter.

This means the company is on track to achieve its production guidance of 92,000 to 95,000 tonnes of copper.

One slight negative, though not unexpected, was that Sandfire has increased its full year cost guidance. Driven by global inflationary cost pressures, the company has updated its full year C1 costs guidance to US$1.19 per pound. This compares to its previous guidance, which was also increased, of US$1.10 to US$1.20 per pound.

‘Transformational period

Sandfire’s Managing Director and CEO, Karl Simich, was very pleased with the quarter. He commented:

“The March Quarter was a transformational period for Sandfire. The completion of the MATSA acquisition, its successful and rapid integration into our business, and the excellent progress we are making with construction at Motheo, signal the start of an exciting new era of growth for our business.”

We are pleased to confirm the ongoing successful integration of the MATSA Operation, after receiving the keys on 1 February.

MATSA has made a strong initial contribution to the Group’s production, which is in-line with expectations and, combined with another robust performance at DeGrussa, puts us on track to achieve our updated Group production guidance for FY2022.”

And while Simich acknowledges that costs are rising, he highlights that prices are also been driven higher and offsetting this. He explained:

“The pressures of global cost inflation combined with the ongoing consequential impacts of COVID19 transmission, remain significant challenges for the resource sector globally. Sandfire is not immune from these challenges and, as a result, we have increased our C1 unit cost guidance for FY2022.

While cost inflation and rising energy costs in Europe are undeniable challenges, it’s important to remember that these same cost pressures are helping to drive up the prices for the metals we produce – many of which are at multi-year or all-time highs. This means that we are generating very healthy EBITDA cash-flow margins across the expanded business – as reflected in the strong sales revenue, EBITDA and operating cash-flows reported for the Quarter.”

The post Sandfire share price shoots 12% higher on ‘transformational’ quarter appeared first on The Motley Fool Australia.

Should you invest $1,000 in Sandfire right now?

Before you consider Sandfire, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Sandfire wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

All that glitters isn’t gold: Here are the worst performing ASX mining shares of the quarter

Leading brokers name 3 ASX shares to sell today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!