Centamin shares rise after dividend increase

Shares in Egypt-focused gold miner Centamin climbed to their highest level since the US election on Wednesday, after it raised its dividend following a 26 per cent increase in annual production.

Shares in the company, which suffered as the price of gold declined after Donald Trump’s election victory, were up 3.7 per cent at publication time, to 163p.

The miner said its dividend for 2016 would be 13.5 cents a share, above analysts’ estimates, taking the full year payout to $178m. That equals around 70 per cent of the company’s net free cash flow last year.

Centamin reported full-year 2016 earnings of 18.61 US cents a share, up 313 per cent compared to the year earlier.

“While earnings were a touch light, these were of little significance against the stellar final dividend,” analysts at Investec said. “It is great to see a company use its excess cashflows to reward shareholders.”

The miner said it expects to produce 540,000 ounces of gold in 2017 at a cash cost of $580 per ounce. Gold is currently trading at $1,210 a troy ounce. The guidance “looks comfortable, supporting future dividends,” Investec said.