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• DNG took advantage of the elevated gold price in Q1, posting significant beats on revenue and profitability. This sets the Company up well for another record year and boosts its cash balance for growth initiatives.
• Dynacor continued to return capital to shareholders, buying back 927K shares ($2.7M) during the quarter.
• DNG added to its strong balance sheet with $28M in cash (up from $23M in December 2023), $52M in working capital, and negligible debt.
Dynacor Group (DNG:TSX) reported Q1 financial results that came in ahead of our expectations, with significant beats on revenue and cash flow. The beat was primarily due to the elevated gold price and this was compounded by another strong quarter operationally. We continue to believe DNG can sustain its historical production growth rates (~10%) as it begins its next phase of growth and the gold price remains supportive. We are maintaining our BUY rating and increasing our target price on Dynacor from C$6.50/share to C$7.50/share.
Key Highlights
• Tonnes processed came in at 44.0Kt (+6% YoY) translating to 31.8Koz AuEq produced (+8% YoY) both roughly in line with our estimates.
• Given the increased gold price ($2,075/oz selling price), sales came in at $67.7M (+19% YoY), beating our $66.5M estimate, marking a record quarter.
• Cash gross margin for the quarter was 15% compared to our estimate of 13% and 15% in Q1/23.
• Gross operating margin was $9.1M or $280/oz compared to our model that assumed $7.7M or $233/oz.
• Operating cash flow (before working capital) was $5.7M (8% of revenue) significantly beating our estimate of $4.4M (7% of revenue) while EBITDA also beat our estimate coming in at $8.1M vs. our $6.4M. After working capital, OCF came in at $9.6M mainly due to decreased inventories.
• Net income came in at $4.8M or $0.13/share vs. our estimates of $3.5M or $0.10/share.
• The Company ended the quarter with $27.7M in cash compared to $22.5M at year-end 2023.
DNG: Q1 Financials; Large Beat on Earnings
What you need to know:• DNG took advantage of the elevated gold price in Q1, posting significant beats on revenue and profitability. This sets the Company up well for another record year and boosts its cash balance for growth initiatives.
• Dynacor continued to return capital to shareholders, buying back 927K shares ($2.7M) during the quarter.
• DNG added to its strong balance sheet with $28M in cash (up from $23M in December 2023), $52M in working capital, and negligible debt.
Dynacor Group (DNG:TSX) reported Q1 financial results that came in ahead of our expectations, with significant beats on revenue and cash flow. The beat was primarily due to the elevated gold price and this was compounded by another strong quarter operationally. We continue to believe DNG can sustain its historical production growth rates (~10%) as it begins its next phase of growth and the gold price remains supportive. We are maintaining our BUY rating and increasing our target price on Dynacor from C$6.50/share to C$7.50/share.
Key Highlights
• Tonnes processed came in at 44.0Kt (+6% YoY) translating to 31.8Koz AuEq produced (+8% YoY) both roughly in line with our estimates.
• Given the increased gold price ($2,075/oz selling price), sales came in at $67.7M (+19% YoY), beating our $66.5M estimate, marking a record quarter.
• Cash gross margin for the quarter was 15% compared to our estimate of 13% and 15% in Q1/23.
• Gross operating margin was $9.1M or $280/oz compared to our model that assumed $7.7M or $233/oz.
• Operating cash flow (before working capital) was $5.7M (8% of revenue) significantly beating our estimate of $4.4M (7% of revenue) while EBITDA also beat our estimate coming in at $8.1M vs. our $6.4M. After working capital, OCF came in at $9.6M mainly due to decreased inventories.
• Net income came in at $4.8M or $0.13/share vs. our estimates of $3.5M or $0.10/share.
• The Company ended the quarter with $27.7M in cash compared to $22.5M at year-end 2023.
Underlying
DYNACOR GROUP INC.
Provider
Atrium Research Corporation
Atrium Research provides institutional quality issuer paid research on North American public equities using deep fundamental analysis. Our research reports are disseminated through Bloomberg, FactSet, Capital IQ, Reuters and many more, as well as through our social media and email distribution lists.
Ben Pirie
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