6th Aug 2015 08:55
LONDON (Alliance News) - Randgold Resources Ltd Thursday said its pretax profit fell in the first half of 2015 due to lower gold prices and higher costs but said its results stood strong against a sector "buckling under the pressure of the gold price downturn".
The FTSE 100-listed gold miner reported a pretax profit of USD72.0 million in the second quarter of 2015, falling from a USD92.1 million profit a year earlier, as revenue dropped to USD285.0 million from USD294.9 million.
However, the company said revenue would have actually risen to USD296.7 million in the first half if it had sold the USD11.7 million worth of gold dore available at the end of the first half, but this will now be sold in the second half of the year.
Alongside the fall in revenue, the miner reported higher depreciation and amortisation costs of USD43.0 million in the quarter from USD31.7 million a year earlier, with mine production costs also increasing to USD127.3 million from USD131.1 million. Exploration and corporate costs also experienced a small rise.
That brought pretax profit for the first half to USD132.9 million, a dramatic fall from USD200.1 million a year earlier. Revenue for the half came in at USD546.4 million compared to USD609.8 million, as Randgold received around USD100 less per ounce year-on-year.
Revenue fell as lower gold prices and higher cash costs offset a large increase in gold production in the first half to 579,570 ounces from 561,046 ounces. Sales increased to 582,045 ounces from 555,393 ounces.
The additional gold sales were a result of the increased production from the Loulo-Gounkoto complex in Mali as well as from Kibali in the Democratic Republic of Congo.
Analysts at Panmure Gordon said Randgold's production figures were solid and in-line with expectations.
The average gold price achieved in the first half of 2015 was USD1,202 per ounce, compared to USD1,293 per ounce a year earlier, whilst Randgold's cash cost per ounce rose to USD695 per ounce from USD693.
The gold price has weakened further since then, and was trading at around USD1,086 per ounce on Thursday. However, Randgold said it is positioned to deal with prices as low as USD1,000 per ounce going forward.
"In the 20 years of Randgold's existence, we have made no material changes to our core strategy, but the refinements we introduced when we saw the downturn coming, and the fact that our business models were prudently based on USD1,000 per ounce, are enabling us actively to manage the weakening gold price," said Randgold.
Randgold shares were up 1.4% to 3,888.00 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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