"Randgold bucks industry trend to deliver record production for 2015," begins Randgold Resources ' (RRS) fourth-quarter results. Such editorialising reads like puff, but a move to increase production by 6 per cent in 2015 is worth crowing about. That's because the gold miner also managed to lower cash costs below market expectations to $679 per ounce last year, and an average of $632 in the final quarter. Consequently, that helped boost free cash flow and more than double the cash balance. This pleased the market, which sent the shares up by 3 per cent in early trading.
A reduced cost base makes the uptick in the gold price so far this year even better news. Chief executive Mark Bristow says the mines will remain cash generative at prices "well below the $1,000 an ounce level", while the Loulo-Gounkoto and Kibali mines are now expected to produce more than 600,000 ounces of gold a year for the next decade, at total cash costs of $600 an ounce.
Analysts at Investec are forecasting earnings per share of $2.13 this year, and pre-tax profit of $285m, up from $1.93 and $242m in 2015.
RANDGOLD RESOURCES (RRS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 5,440p | MARKET VALUE: | £5.07bn | |
| TOUCH: | 5,435-5,445p | 12-MONTH HIGH: | 5,550p | LOW: 3,546p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 39 | |
| NET ASSET VALUE: | 4,010¢ | NET CASH: | $212m | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 1.13 | 497 | 420 | 40 |
| 2012 | 1.18 | 548 | 470 | 50 |
| 2013 | 1.14 | 402 | 302 | 50 |
| 2014 | 1.09 | 353 | 254 | 60 |
| 2015 | 1.00 | 261 | 203 | 66 |
| % change | -8 | -26 | -20 | +10 |
Ex-div: 17 Mar Payment: 27 May £1=$1.45 | ||||
