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

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Here’s why you really should own at least some bitcoin
Bitcoin

Here’s why you really should own at least some bitcoin

While bitcoin is having a quiet year – at least in relative terms – its potential to become the default cash system for the internet is undiminished, …
16 Sep 2020
Will a second wave of Covid lead to another stockmarket crash?
Stockmarkets

Will a second wave of Covid lead to another stockmarket crash?

Can we expect to see another lockdown like in March, and what will that mean for your money? John Stepek explains.
18 Sep 2020
James Ferguson: How bad data is driving fear of a second wave of Covid-19
UK Economy

James Ferguson: How bad data is driving fear of a second wave of Covid-19

Merryn and John talk to MoneyWeek regular James Ferguson about the rise in infections in coronavirus and what the data is really telling us.
17 Sep 2020