Judging by record production and a 25 per cent hike in the annual dividend,
Randgold pushed up full-year production by 14 per cent to 794,844 ounces, as the expansion of its flagship Loulo-Gounkoto complex in Mali moved ahead despite the insurgency by Islamists. Loulo exceeded its 2012 production target, delivering 503,224 ounces as the development of its Yalea and Gara mines continued apace. However, frequent outages in the grid power supply at the Tongon mine in Côte d'Ivoire - now remedied - reduced production there by 16 per cent.
Revenues were driven by a 10 per cent increase in gold sales, together with a 5 per cent rise in the average realised gold price to $1,652 (£1,046) an ounce. However, profits were held in check by an increase in fourth-quarter cash costs, largely as a result of a mill fire at Tongon. Despite this, Randgold recorded a 17 per cent rise in full-year net profits to $508m. Cash reserves remain strong despite $563m in capital expenditure, mainly linked to the giant Kibali project in the Congo.
Prior to these figures, broker Fox-Davies anticipated 2013 EPS of 739.1¢.
|RANDGOLD RESOURCES (RRS)|
|ORD PRICE:||6,360p||MARKET VALUE:||£5.9bn|
|TOUCH:||6,355-6,370p||12-MONTH HIGH:||7,875p||LOW: 4,480p|
|DIVIDEND YIELD:||0.5%||PE RATIO:||21|
|NET ASSET VALUE:||2,844¢||NET CASH:||$376m|
|Year to 31 Dec||Turnover ($bn)||Pre-tax profit ($m)||Earnings per share (¢)||Dividend per share (¢)|
Trading at 13.5 times forecast earnings, Randgold' shares offer potential upside, although that would be largely predicated on a rise in the gold price, which is now far from certain. Given this - and the unresolved Malian security issues - we return our rating to hold.
Last IC view: Buy, 6,305p, 9 Aug 2012