15th Feb 2023 10:43
(Alliance News) - Pan African Resources PLC said on Wednesday that its interim profit declined steeply as it battled against production constraints and rising costs.
The Rosebank-headquartered gold producer saw its pretax profit drop to USD38.9 million for the six months that ended December 31, down 37% from USD61.6 million in the prior year.
Revenue fell by 19% to USD156.5 million from USD193.6 million over this period on the back of dwindling production.
Gold production decreased by 15% to 92,307 ounces from 108,085 ounces, mainly attributable to troubles at its Barberton mines' underground operations in Mpumalanga, South Africa.
Earnings per share and headline earnings per share were at USD1.52, down 36% from USD2.39.
The group said it had embarked on a number of restructuring initiatives to reduce its production cost in real terms.
It said it expected this, when combined with the electricity cost savings from large-scale solar photovoltaic renewable energy projects and anticipated increased production during the remainder of the 2023 financial year, to contribute to reducing unit production cost in the future.
All-in sustaining costs for six months to December 31 rose by 10% to USD1,291 an ounce from USD1,173 an ounce.
"We believe that the tangible measures being implemented at these operations, as detailed in this announcement, will result in a significant improvement in production during the second half of the financial year and in the years ahead," the company said.
Going forward, the gold producer maintained full-year production guidance at between 195,000 ounces and 205,000 ounces for the financial year ending June 30. In 2022, output was at 205,459 ounces.
Its shares were down 1.4% at 14.79 pence on Wednesday afternoon in London, while its Johannesburg shares also lost 0.6% to ZAR3.24.
By Artwell Dlamini, Alliance News reporter
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