A decent dividend hike wasn't enough to stop shares in gold miner African Barrick Gold falling sharply on the back of these half-year figures. Managers had foreshadowed the main operational issues that would hit first-half performance but with costs up and production down, the shares could struggle.
Profits slipped on the back of a 14 per cent fall in gold production in the period to 297,742 ounces, while unit cash costs increased a meaty 43 per cent to $938 (£605) an ounce. This reflected planned maintenance work at the Tanzanian operations that effectively reduced grades by 15 per cent year-on-year. That was partly offset by a 12 per cent increase in realised gold prices since end-June 2011, as well the fact that the group sold more gold than it produced. Meanwhile, ancillary copper production fell 22 per cent to 6.1m pounds (around 2,775 tonnes)
Management maintained full-year production guidance at 675,000-725,000 ounces, although cash costs per ounce are expected to come in at the upper end of a $790-$860 range. Investec Securities expects adjusted EPS of 58.5¢ (2011: 66.9¢).
| AFRICAN BARRICK GOLD (ABG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 355p | MARKET VALUE: | £1.46bn | |
| TOUCH: | 355-361p | 12-MONTH HIGH: | 624p | LOW: 303p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 676¢ | NET CASH: | $504m | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 578 | 178 | 29.3 | 3.20 |
| 2012 | 534 | 96.9 | 15.9 | 4.00 |
| % change | -8 | -46 | -46 | +25 |
Ex-div:29 Aug Payment:24 Sep £1=$1.55 | ||||
