Randgold’s fourth-quarter profits up 76%

RANDGOLD Resources said yesterday that its fourth-quarter profit had jumped by as much as 76 percent after prices for the metal had gone up and the miner’s output had increased.

The miner said net income for the three months to December rose to $94.3 million (R1.25 billion) from $53.3m a year earlier.

The company raised its dividend 52 percent to $1 a share.

Gold production has increased by 16 percent from a year ago to reach 378 388 ounces, while the incurred cost per ounce had fallen 6 percent to $549.

“We plan to sustain our profitability over the next decade at a gold price of $1 000 per ounce,” chief executive Mark Bristow said, adding that Randgold was studying developing three new mines over the next five years.

No debt

He said that if the forecast gold prices held, Randgold would have “a much stronger cash position in a year’s time”.

Randgold had $516.3m in cash and no debt at the end of the year, exceeding its target of $500m.

Miners have been buoyed by gold’s first annual gain in four years, with fourth-quarter prices averaging 10 percent more than a year earlier.

The Bloomberg Intelligence Global Senior Gold Index of major miners jumped 64 percent last year, the most in data going back a decade.

Randgold’s dividend marks “the start of meaningful increases in shareholder returns”, Investec analysts wrote in a note after the results.

“Shareholders will be eyeing the company’s strong future cash-flows, as evidenced by the growth in the balance sheet.”

Randgold shares gained 55 percent last year.Gold traded near its highest level since November yesterday as investors assessed what the US payroll data released on Friday mean for Federal Reserve policy amid the political uncertainty created by President Donald Trump.

Bullion for immediate delivery traded 0.3 percent higher at $1 223.59 an ounce.

Randgold reported full-year profit of $294m and production of 1.25 million ounces, saying some profitability was offset by a 126 percent increase in corporate tax expenses.

It expects to mine between 1.25 million and 1.3 million ounces this year at an average cost of between $580 and $630 an ounce after royalties.

16% Annual increase in Randgold’s production

PHOTO: BLOOMBERG A worker uses a pressure spray to clean up newly moulded gold bars at the Kibali gold mine, operated by Randgold Resources. Mark Bristow, the chief executive of Randgold Resources, says the company is studying developing three new mines over the next...