Target Raised Dynacor Group Inc.’s first-quarter results position it for “another year of strong growth,” according to Singular Research analyst Jim Marrone.
“Q1:24 results were strong led by elevated gold prices and solid volume growth. Q1:24 run rate suggests Dynacor remains on track to achieve its full year FY:24 guidance,” he said.
On May 16, the Montreal-based industrial gold ore processor with operations in Peru reported record revenue of $67.7-million, up 19 per cent year-over-year. EBITDA of $8.1-million was up 17.4 per cent.
“We expect strong year-over-year revenue growth in Q2:24,” said Mr. Marrone. “Dynacor reported monthly sales of $25.0 million in April 2024. We do note that the gold prices have been on an upward trend which should support sales going forward. We estimate that the revenue for Q3:24 will show strong year-over-year growth. For 2024, we model sales of $273.1 million and EPS of $0.42. We model an average realized gold price of $2,156/oz. for FY:24. We expect gold sales of 126,684 AuEq oz. [gold equivalent ounces] for FY:24.”
Keeping a “buy” recommendation for Dynacor shares, the analyst hiked his target to US$5.50 from US$3.50. The average is $7.52 (Canadian).
“The expansion at its Veta Dorada processing plant (increasing its mill capacity to 500 tpd from 430 tpd) positions Dynacor for continued growth in the ASM ore-processing business through 2024 and beyond,” said Mr. Marrone. “Dynacor is a monthly dividend paying company. The dividend has been consistently growing over the last four years. The firm has increased the dividend to C$0.14 per year from January 2024 (up 16.7 per cent monthly). The current annualized dividend yield is 2.6 per cent. Dynacor trades at an enterprise value of $893 per ounce, which is at nearly 70-per-cent discount to the peer group average despite strong cash flows.”