Barrick Gold Corp. (ABX, Financial) was up 0.73% to $13.75 per share on Wednesday in after hours trading following financial results of full fiscal 2017 and its last quarter.
Barrick Gold Corp. reported an earnings per share, adjusted to a one-time charge, of 22 cents on a year over year basis. The biggest producer of gold in the world beat consensus by .01 cent and generated a positive surprise among analysts of 4.80%. The adjusted net profit was $253 million.
The quarterly bottom line was backed on a revenue of $2.23 billion, a 3.9% decline on a year over year basis. The Canadian miner beat expectations on fourth quarter revenue by $20 million.
The Canadian gold producer closed full fiscal of 2017 reporting a net profit, adjusted for one-time charges, of $876 million or 75 cents per share. This was a 7.1% improvement from full fiscal 2016 thanks to higher metal prices, a decrease in direct mining costs, a lower devaluation of the company’s inventory and lower impact of Acacia’s high cost operations.
In 2017, the contribution of Acacia Mining to the sales of Barrick Gold was lower due to a ban imposed by the Tanzanian Government. Barrick Gold Corp. has an interest stake of 63.9% in Acacia Mining Plc.
The bottom line of 2017 was backed on revenue of $8.37 billion versus a revenue of $8.56 reported by the company in 2016. This decline was mainly the result of lower gold sales volume.
On a gold production of 5.32 million ounces (-3.5% year over year and within expectations) the company sold approximately 5.30 million ounces of gold.
In 2016, Barrick Gold Corp sold about 5.55 million ounces of gold. The year over year increase of $10 per ounce in the price that Barrick Gold realized from the sale of one ounce of gold in 2017, was not enough to offset the negative effect of a decline in the volume of gold sold. Besides issues in Tanzania, the sale of 50% of Veladero in Argentina also affected sales.
The Canadian miner also produces and sells copper. In 2017, Barrick produced 413 million pounds of copper (-3.7% year over year and a bit below guidance) and sold 405 million pounds of the red metal (flat on a year over year basis).
In 2017, the all-in sustaining cost was $750 per ounce of metal. It sold 3% higher than in 2016. The higher amount reflects “a planned increase in mine site sustaining capital expenditures," the company said.
During the year, operations at Barrick Gold generated cash flows of $2.07 billion. With capital expenditures of approximately $1.4 billion, this led to a free cash flow of $669 million.
The company says that it reduced total debt by 19% to $6.4 billion.The target for 2018 is to trim the financial burden to $5 billion.
For full fiscal of 2018, Barrick Gold targets a gold production of 4.5 million to 5 million ounces at an all-in sustaining cost of $765 to $815 per ounce of metal sold. The guidance on gold production for 2018 represents a 6% to 15.4% decline from 2017 output.
The biggest producer of gold in the world has also provided its shareholders with expectations on gold output for the period from 2019 to 2022, forecasting an annual volume of 4.2 million to 4.6 million ounces of gold. The yearly all-in sustaining cost is expected to be of $750 to $875 per ounce of metal sold in the four-year range.
In addition, Barrick Gold Corporation' board of directors has authorized the payment of a 3 cents cash quarterly dividend. The dividend will be paid on March 15, 2018, to shareholders of record as of Feb. 28.
Barrick Gold Corp. has a market capitalization of $15.42 billion and a 52-week range of $12.60 to $20.78 per ounce. The recommendation rating on shares of Barrick Gold Corporation is 2.7 out of a total of 5 on the New York Stock Exchange, while the price target is on average $17.97 per share.
(Disclosure: I have no positions in any stock mentioned in this article.)
