Spin may be an unavoidable part of corporate communications, but it's no less annoying when companies editorialise their results, as Randgold Resources (RRS) did at its half-year. "Randgold digs deep after tough Q2" is the breezy headline to a news article explaining a recent slump in production. The simple fact is these were disappointing financials: gold production of 573,406 ounces (oz) was down on 2015, total cash costs jumped 12 per cent quarter on quarter and earnings missed consensus forecasts.
There were two operational reasons for the problems. The grid power issues that have blighted Randgold's Tongon mine in the Ivory Coast continued into the second quarter, while the complexity of the ore types at the Kibali site in the Democratic Republic of Congo led to a 6 per cent quarter-on-quarter production drop to 122,000oz and sharply lower profits. Reassuringly, chief executive Mark Bristow has reported improvements at both sites since the period-end.
Before these results, analysts at Numis Securities predicted full-year adjusted pre-tax profits of $463m and EPS of $3.12, against $261m and $2.03 in the 12 months to December 2015.
RANDGOLD RESOURCES (RRS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 8,010p | MARKET VALUE: | £7.5bn | |
| TOUCH: | 8,005-8,010p | 12-MONTH HIGH: | 9,820p | LOW: 3546p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 52 | |
| NET ASSET VALUE: | 3,571¢ | NET CASH: | $273m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 479 | 133 | 110 | nil |
| 2016 | 544 | 165 | 110 | nil |
| % change | +14 | +24 | — | — |
Ex-div: na Payment: na £1=$1.33 | ||||
