Centerra Gold Intrinsic Value Calculation – Centerra Gold Revenues Beat Expectations Despite 23% Drop in 1Q 2023 Earnings
May 17, 2023
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Centerra Gold ($TSX:CG), a Canadian-based gold mining company, reported its First Quarter 2023 Earnings with revenues exceeding expectations, coming in at US$226.5m (down 23% from 1Q 2022). The drop in revenue was largely attributed to lower gold prices, along with a decrease in production caused by the pandemic.
Additionally, the company’s expenses in the quarter were higher than expected, resulting in a drop in earnings per share. With gold prices rebounding, Centerra Gold is expected to see better performance in the upcoming quarters. The company has also taken steps to reduce costs and increase efficiency. This includes implementing a new digital platform, as well as investing in smart technologies that will help maximize efficiency and reduce costs. Additionally, Centerra Gold is investing in renewable energy sources to further reduce costs and its environmental impact. With gold prices rebounding and the company taking steps to reduce costs and increase efficiency, Centerra Gold is well-positioned to continue to exceed expectations.
Earnings
In its earning report of FY2022 Q4 ending December 31 2022, CENTERRA GOLD reported a total revenue of 208.3M USD and a net income loss of 130.08M USD. This marks a 17.0% decrease in total revenue, and a 147.3% decrease in net income from the previous year. Over the past three years, CENTERRA GOLD’s total revenue has dropped from 386.81M USD to 208.3M USD.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Centerra Gold. More…
| Total Revenues | Net Income | Net Margin |
| 850.19 | -77.21 | 1.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Centerra Gold. More…
| Operations | Investing | Financing |
| -1.98 | -255.64 | -157.69 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Centerra Gold. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 2.34k | 525.62 | 8.29 |
Key Ratios Snapshot
Some of the financial key ratios for Centerra Gold are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -14.8% | -9.7% | -5.1% |
| FCF Margin | ROE | ROA |
| -9.8% | -1.5% | -1.2% |
Analysis – Centerra Gold Intrinsic Value Calculation
GoodWhale has conducted an analysis of CENTERRA GOLD‘s health and found that the intrinsic value of the company’s shares is around CA$8.6. This is calculated by GoodWhale’s proprietary Valuation Line. Currently, the stock is being traded at CA$7.5, creating an opportunity to purchase CENTERRA GOLD shares at a fair price that is undervalued by 12.3%. This could be an ideal situation for investors looking to take advantage of a discounted price. More…
Peers
The competition between Centerra Gold Inc and its competitors is fierce. All four companies are vying for a share of the gold market, and each has its own strengths and weaknesses. Centerra is the largest producer of gold in Canada, and its main competitors are Roscan Gold Corp, Soma Gold Corp, and Tanami Gold NL. All four companies have different strategies for mining and extracting gold, and each has its own strengths and weaknesses. The competition between these companies is essential to the gold industry, and it will ultimately determine who will be the biggest player in the market.
– Roscan Gold Corp ($TSXV:ROS)
Roscan Gold Corp. is a Canadian gold exploration company. The company has a market capitalization of $62.54 million as of 2022 and a negative return on equity of 1069.64%. Roscan Gold Corp. is engaged in the business of exploring, evaluating, and developing mineral properties in West Africa. The company’s flagship property is the Kaninko Project, located in Guinea.
– Soma Gold Corp ($TSXV:SOMA)
Soma Gold Corp is a Canadian precious metals mining company with a focus on gold and silver projects in Colombia. The company has a market capitalization of $26.41 million and a return on equity of 168.84%. The company’s primary asset is the Cajuilito project, located in the municipality of Quinchia, Colombia.
– Tanami Gold NL ($ASX:TAM)
Tanami Gold NL is an Australian gold mining company with a market capitalisation of $45.83 million as of 2022. The company has a return on equity of 11.77%. Tanami Gold NL is engaged in the exploration, development and production of gold in the Northern Territory of Australia. The company’s flagship project is the Coyote Gold Mine, which is located in the Tanami Desert region of the Northern Territory.
Summary
Centerra Gold experienced a 23% decrease in revenue for the first quarter of 2023 compared to the first quarter of 2022. Despite this, the company’s revenues still managed to beat expectations. Unfortunately, the company’s earnings per share (EPS) did not meet expectations. Investors should pay close attention to the company’s performance over the next few quarters, as well as its guidance on future earnings.
In addition, they should pay attention to the company’s capital allocation decisions, cost structure, and balance sheet. As always, investors should also take into account any macroeconomic trends that may affect the stock’s performance. Ultimately, an evaluation of the company’s fundamentals will help investors decide if Centerra Gold is a good investment opportunity.
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