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Randgold boosts output

Net profits may have slipped with the gold price, but Randgold is delivering on the operational front
February 9, 2015

West African gold miner Randgold Resources (RRS) disappointed the City with net profit of $235m (£155m) - a 16 per cent fall on last year's figure. Yet management still felt able to bump up the dividend by a fifth on the back of a largely positive operating performance. And Randgold's solid balance sheet positions it well to exploit acquisition opportunities if indebted precious metals miners start to hive off assets.

IC TIP: Hold at 5330p

The decline in profitability was primarily due to the fall-away in the gold price - down 27 per cent since February 2013. Randgold chief executive Mark Bristow argues that the miner has been quick to respond to the lower-price environment, having rejigged its cost base to sustain profitability at a gold price of $1,000 an ounce.

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