African Barrick Gold posts drop in annual net profits

African Barrick Gold's shares plunged Wednesday after saying it was working to reduce costs following a drop in annual net profits.

African Barrick Gold's shares plunged Wednesday after saying it was working to reduce costs following a drop in annual net profits.

Shares fell 8.33% to 312.60p at 8:58 as the FTSE 250 company reported net profits of $48.2m for 2012 - down from $284.7m the year before.

Revenues fell from $1.2bn to $1.1bn, while the cost of sales rose from $704.1m to $802.7m.

"As we progress through 2013, we are focused on reducing our cost base from

current levels to ensure the business returns to delivering appropriate levels of free cash flow." said Greg Hawkins, Chief Executive Officer of African Barrick Gold.

"Cash flow generation and improving returns from our assets form a key part of our operational review and we will update on our progress throughout the course of the year. The 2012 dividend is maintained at the 2011 level and this is both an expression of our confidence in the business as well as our commitment to shareholder returns."

The gold mining company said it achieved gold production of 626,212 ounces and cash costs of $949 per ounce sold, within recent guidance.

During the year the firm made progress in key expansion projects in Bulyanhulu - the CIL Expansion and Upper East Acceleration.

Another highlight for the year included the renewal of the contract for North Mara special mining licences on the existing terms and conditions for 15 years.

The group also acquired an exploration package of 2,800km2 in Kenya for an initial consideration of $22m.s

African Barrick's net cash position was at $401m by the end of the year.

An operational review has been carried out to drive improved returns and free cash flow generation from the existing asset base, the company added.

The miner proposed a final dividend of $0.123 per share, a total dividend for 2012 of $0.163 per share.

RD

Recommended

Share tips of the week – 22 October
Share tips

Share tips of the week – 22 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
22 Oct 2021
Three dividend stocks from the dynamic Asia/Pacific region
Share tips

Three dividend stocks from the dynamic Asia/Pacific region

Professional investor Sat Duhra of the Henderson Far East Income investment trust highlights three of his favourite stocks.
18 Oct 2021
Share tips of the week – 15 October
Share tips

Share tips of the week – 15 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
15 Oct 2021
Trading: stash the family cash in this cheap wealth management firm
Trading

Trading: stash the family cash in this cheap wealth management firm

Wealth management is a growth market. Rathbone Brothers should be a prime beneficiary – and looks cheap. Matthew Partridge explains the best way to pl…
12 Oct 2021

Most Popular

How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
Properties for sale for around £1m
Houses for sale

Properties for sale for around £1m

From a stone-built farmhouse in the Snowdonia National Park, to a Victorian terraced house close to London’s Regent’s Canal, eight of the best propert…
15 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021