16th Sep 2015 09:45
LONDON (Alliance News) - Pan African Resources PLC Wednesday said its pretax profit fell by more than half in the last financial year, resulting in the company lowering its full-year dividend. But the miner said it has resolved the issues that caused the weaker performance, which should lead to a much stronger year going forward.
The South African gold and platinum miner reported a ZAR284.6 million million pretax profit in the year ended June 30, less than half the ZAR572.9 million profit booked a year earlier as revenue dropped to ZAR2.52 billion from ZAR2.60 billion.
Earnings before interest, tax, depreciation, amortisation and items totalled ZAR512.1 million, down from ZAR745.5 million.
In sterling terms, the miner's pretax profit in the last financial year fell to GBP15.8 million from GBP33.9 million as revenue came in at GBP140.4 million, down from GBP154.2 million. Ebitda before items dropped to GBP28.4 million from GBP44.2 million.
Following the dramatic drop in earnings, the company lowered its full-year dividend to ZAR0.11466 per share, or 0.53958 pence per share, from the ZAR0.1410 per share, or 0.82 pence per share, dividend paid in the last financial year.
"Despite a very difficult financial year, the board has proposed an attractive final dividend to shareholders. This proposed dividend demonstrates our confidence in the robust nature of our operations," said Chief Executive Cobus Loots.
"The reduced dividend is not a departure from the group's progressive dividend policy and the board will consider an interim dividend in the 2016 financial year," the company added.
Revenue in the year was hit by lower gold prices, higher costs and lower levels of production.
Gold production from underground operations fell to 135,061 ounces from 153,935 ounces as production from both its Evander and Baberton mines both experienced falls in production year-on-year.
Gold production from surface operations dropped to 9,990 ounces in the year, falling from 11,359 ounces and gold production.
Overall gold sales fell to 145,051 ounces of gold from 165,294 ounces following the reduced production.
Cash costs increased in both rand and dollar terms during the year. All-in-costs in the year rose 13.7% to ZAR425,084 per kilogramme from ZAR374,015, or in dollar terms all-in-costs rose by 2.8% to USD1,155 per ounce from USD1,124 per ounce.
Gold prices in rand terms rose 3% year-on-year to ZAR446,274 per kilogramme from ZAR433,437 per kilogramme, but fell 7% in dollar terms to USD1,212 per ounce from USD1,303.
Gold was trading at around USD1,107 per ounce on Wednesday morning.
Total capital expenditure in the year came in at ZAR352.0 million, or GBP19.6 million, down from ZAR363.0 million or GBP21.5 million a year ago.
Net debt significantly increased in the year to ZAR321.1 million from ZAR101.0 million, or in sterling terms it rose to GBP16.6 million from GBP5.6 million.
"Having implemented a number of corrective measures to resolve the issues that impacted on the 2015 financial year, the group is well positioned to deliver an improved performance in 2016," said Loots.
Pan African shares were down 1.1% to 7.22 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Pan African Resources