Silvercorp Metals Q3 Profit Falls 40%

Silvercorp Metals (TSE: SVM) (NYSE: SVM), a precious metals company producing silver, zinc, and lead metals in concentrates from Chinese mines, reported a higher revenue but a lower profit in the third quarter of 2022.

Q3 Earnings

Net income attributed to equity shareholders was $5.06 million ($0.03 per share) in the quarter ended December 31, 2021, down 40% from $8.39 million ($0.05 per share) in the prior-year quarter.

Q3 2022 revenue increased 11% to $59.08 million from $53.30 million the year before.

Silvercorp sold 17.2 million pounds of lead, 1.7 million ounces of silver, 7.6 million pounds of zinc, and 1,100 ounces of gold in the quarter. This was an increase of 4%, 38% and 2% in silver, gold and lead sales, and a 15% decrease in zinc sales, compared to the same quarter of the previous year.

With $211.6 million in cash and cash equivalents and short-term investments as of December 31, 2021, the silver miner ended the year with a solid balance sheet.

Silvercorp expects to produce 8.4 to 71.3 million pounds of lead, 7 to 7.3 million ounces of silver, 32 to 34.5 million pounds of zinc, and 6,300 to 7,900 ounces of gold in the year ending in March 2023.

The company noted that the forecast represents an increase in production of approximately 9% in ores, 100% in gold, 11% in silver, 3% in lead and 12% to 21% in zinc compared to its forecast for the 2022 financial year.

Wall Street’s Take

Following the results, BMO Capital analyst Ryan Thompson kept a Hold rating on SVM with a C$7.62 price target. This implies 76.4% upside potential.  

The rest of the Street is cautiously optimistic on SVM with a Moderate Buy rating based on one Buy and two Holds. The average Silvercorp Metals price target of C$7.41 implies 71.4% upside potential to current levels.

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