Rewind to this time last year and Randgold's (RRS) shares and earnings were reeling from a plunging gold price. Now, London's highest-profile gold producer must be pleased to be reporting a more stable performance. Net profit in the first six months climbed 11 per cent to $151m (£89m) on gold production totalling a whopping 561,000 ounces - up over 40 per cent year on year after the launch of the Kibali mine in the Democratic Republic of Congo.
True, those earnings remain well below the $244m booked two years ago. And there have been a few ramp-up problems at Kibali and the Tongon mine in the Ivory Coast. Yet Randgold's average cost of production remains firmly in the lowest quartile of gold producers, having fallen to just $693 an ounce, from $818 last year.
But by far the biggest driver of Randgold's earnings - and consequently share price - is the price of bullion. The yellow metal has bounced around between $1,200 and $1,400 an ounce this past year, and seems to have found solid support around $1,300.
Broker Investec Securities placed its forecasts under review, following unexpectedly high depreciation and amortisation charges for Kibali.
RANDGOLD RESOURCES (RRS) | ||||
---|---|---|---|---|
ORD PRICE: | 5,040p | MARKET VALUE: | £4.7bn | |
TOUCH: | 5,040-5,045p | 12-MONTH HIGH: | 5,440p | LOW: 3,600p |
DIVIDEND YIELD: | 0.6% | PE RATIO: | 27 | |
NET ASSET VALUE: | 3,221¢ | NET DEBT: | 1% |
Half-yeara to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
---|---|---|---|---|
2013 | 514 | 146 | 126 | nil |
2014 | 577 | 200 | 138 | nil |
% change | +12 | +37 | +10 | - |
£1=$1.69 |