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Interactive Investor: Half-year profit boosts Centamin Egypt

Pre-tax profit rocketed from $32 million to $104.3 million on revenues that rose to $167.4 million from $87.2 million.
30.08.11 | Interesting article at Interactive Investor

Gold producer Centamin Egypt (CEY) saw its shares move higher on Tuesday after posting a sharp rise in profit for the six months to the end of June.

Pre-tax profit rocketed from $32 million to $104.3 million (c£63.7 million) on revenues that rose to $167.4 million from $87.2 million.

Centamin said it produced a total of 93,195 ounces of gold, up from 83,432 ounces previously and sold 113,502 ounces, up from 66,378 ounces previously, with its average price climbing to $1,467 an ounce from $1,308, while production costs rose to $567 an ounce from $549.

Earlier this month, the FTSE 250-listed company saw its stock lose a fifth of its value after it cut its output forecast for the year citing lower-than-expected production in the second quarter because of local restrictions on blasting. Output levels were revised to 200,000 to 210,000 ounces from a previous prediction of 250,000 to 290,000 ounces.

Despite this, analyst Adam Kiley at Ambrian maintained his 'buy' rating at the time saying that although the reduced forecast was "disappointing", it was factored into the broker's financial model for the company.

"We believe that short-term share price weakness over the coming months will offer a discounted opportunity to buy into a world-class asset," Kiley said.