Highland Gold net profit tumbles

Russian gold miner Highland Gold said first half net profit fell to $45m from $70.3m a year earlier while pre-tax profit fell by a third due to the higher cost of sales.

The group said that it remains on track to produce between 200,000 ounces and 215,000 ounces of gold and gold equivalents in 2012.

Pre-tax profit for the half year ended June 30th 2012 fell to $57.3m compared to $85.1m for the same period a year ago. Revenue increased to $161.5m from $158.1m.

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EBITDA fell to $65.7m from $88.1m before. EBITDA margin fell from 55.7% to 40.7%.

The firm, which produces gold at its Belaya Gora, Mnogovershinnoye and Novoshirokinskoye mines in Russia, said gold production increased to 101,900 ounces from 93,057 ounces. Gold sales fell to 102,036 ounces versus 104,911 ounces.

Highland Gold said it expects second half operating expenditure to remain stable or below levels during the first half due as it reduces open pit stripping ratios. It expects stable metal production at Mnogovershinnoye in second half.

Capital expenditure rose to $47.1m from $31.4m before. Diluted earnings per share increased to $0.138 from $0.215.

The group also announced a special interim dividend of £0.048 per share.

CJ