Johannesburg - Sibanye Gold expects its attributable profit to fall by as much as 75 percent for the six months to the end of June.
The gold mining company forecast last week that profit attributed to shareholders would fall to between R135 million and R230m in the six months to June from R533m. Sibanye cited events in the March quarter, which on an accumulated basis, had negatively affected production, particularly in January and February.
The news caused Sibanye shares to lose as much as 8.16 percent to touch R16.76, the stock’s lowest level since February 2014. The shares ended 7.84 percent down at R16.82.
Gold fell 0.7 percent to $1 082.76 (R13 650.9) an ounce on Friday, a five-year low, as investors increased speculation the Federal Reserve will soon raise interest rates, reducing demand for the asset as a haven.
Sibanye’s all-in sustaining costs were $1 242 an ounce in the first quarter as a conveyor stoppage that slowed delivery of ore at its Kloof mine and a series of processing-plant incidents curbed production.
“Despite a solid operational performance and return to profitability in the June quarter, profit attributable to shareholders for the six months ended June 30, was negatively affected,” it said on Friday.
In addition, the issue of 156.9 million new Sibanye ordinary shares to Gold One International last May, following the acquisition of the Cooke underground and surface operations resulted in an 18 percent year-on-year increase in the weighted average number of shares in issue, from 772.7 million for the six-months to June last year to an estimated 909.3 million for the six-months to June.
The company expected earnings per share (EPS) and headline earnings per share (HEPS) for the six months to June of between 15c and 25c from 69c and 84c, respectively, in the previous comparative period last year.
“This represents a decrease of between 64 percent and 78 percent in respect of EPS and a decrease of between 70 percent and 82 percent in respect of HEPS,” the company said.
Sibanye owns the Kloof, Driefontein and Cooke gold mines near Carletonville in the Gauteng and the Beatrix gold mine in the Free State.
Sibanye has been eyeing the local platinum mines that Anglo American Platinum wants to sell.
Business Report