Saracen Mineral Holdings says it made $80.2 million in underlying half-year profit, up 84 per cent from a year ago, but it is suspending plans to pay its first dividend as it works to pay down debt.
Saracen says its gold production was up 22 per cent to 216,452 ounces, including 20,634 ounces from a month of operations from the Super Pit in Kalgoorlie, WA, a half-share of which Saracen bought in November for $US750 million.
Saracen’s sales revenue was up 45 per cent to $409.9 million in the six months to December 31, compared to the same period in 2018.
“The key message from these results is that Saracen has continued to grow and will continued to grow,” managing director Raleigh Finlayson said.
Saracen said its all-in-sustaining cost (AISC) was $1,041 per ounce for the half-year, up one per cent from a year ago, while it sold gold for an average price of $1,984 an ounce.
“On the whole, this is a slightly softer result than we anticipated,” Royal Bank of Canada analysts said in a note.
Saracen said it wouldn’t pay a dividend as it works to reduce debt following the Super Pit acquisition and maintain a conservative balance sheet.
It has never paid a dividend, but in August had announced a new dividend policy of paying out 20 to 40 per cent of profit to shareholders.
As of December 31, Saracen owed $385 million from a $400 million loan it took out to help pay for the Super Pit, having repayed $15 million early.
It had $216.7 million in cash on hand, $16.7 million in gold in transit and $45.5 million in investments.
Saracen will also have to pay WA stamp duty on the purchase of the Super Pit, although the exact amount hasn’t been determined.
Sarcen said it was on track to meet its full-year production guidance of 500,000 ounces for the year.
At 1154 AEDT, Saracen shares were up 3.0 per cent to $4.25.
SARACEN DENIES MAIDEN DIVIDEND
* Revenue up 45pct to $409.9m
* Gold production up 22pct to 216,452 ounces
* All-in sustaining cost up 1.0pct to $1,041 per ounce
* Underlying net profit up 84pct to $80.2m
* No interim dividend, unchanged