Randgold Resources hikes final dividend 20% despite 17% profits slump
Annual profits fell 17% at Randgold Resources, as the gold price softened further in the fourth quarter, but the West Africa-focused gold miner has increased the final dividend 20% and made noises about the potential for "transformational" corporate activity.
FTSE 100
8,213.49
16:59 03/05/24
FTSE 350
4,515.50
16:54 03/05/24
FTSE All-Share
4,469.09
17:14 03/05/24
Mining
10,084.30
16:54 03/05/24
Randgold Resources Ltd.
6,546.00p
17:00 28/12/18
Gold sales for the fourth quarter fell 10% from the preceding period to $339.9m as a result of a 4% decrease in production and ounces sold and a 6% decrease in the average gold price received of $1,195 per oz.
Gold production fell at the Loulo-Gounkoto complex and Tongon, but was partly offset by an increase in output at both Kibali and Morila.
Over the year, the company increased gold production to record levels, up 26% to 1.15m oz, and reduced costs 2% to a total cost per ounce of $698 from $715 as it looked to react quickly to cheaper gold selling prices.
But basic earnings per share still declined 16% to $2.54 and Randgold, which also reported on Monday that it will begin development of a fourth underground mine in 2018 below the Gounkoto open pit, saw net cash generated from operating activities slide 32% $317.7m due to the falling gold price and a higher level of tax.
The FTSE 100 group ended the year with $100m cash thanks to strong cashflows from operations after additions to property, plant and equipment, investments in joint ventures and dividends to shareholders, leading management to hike the final cash dividend 20% to 60 cents per share.
Chief executive Mark Bristow acknowledged that while the gold mining industry was struggling in the face of "multiple challenges", Randgold was in "good shape to manage these and to sustain the profitability of its operations at a $1,000-per-oz gold price level".
He added: "The current stress in the gold mining industry is also generating what may well prove to be transformational growth opportunities and we are closely monitoring this situation."