Gains in gold price sees Pan African’s interim earnings surge
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DURBAN - PAN AFRICAN Resources said yesterday that it expected its half-year earnings to surge by more than 90 percent, boosted by an increase of 27.4 percent in the gold price.
The group operates a portfolio of high-margin South African operations, which have a production capacity of about 200 000 ounces of gold a year.
In a trading update for the six months to the end of December, the gold price increased to $1 865 (currently about R27 688) an ounce during the reporting period, up from $1 464 an ounce last year.
Its gold sold during the six-month period increased by 8.6 percent to 98 386 ounces, compared with 90 602 ounces a year earlier. As a result, revenue increased by 38.4 percent to $183.8 million in the six months to the end of December, compared with $132.8m reported at the end of December 2019.
The gold producer said it expected its headline earnings per share (Heps) to increase by between 81 percent and 92 percent, to between 2.05 and 2.17 US cents a share, up from 1.13 US cents reported last year.
Earnings per share (Eps) were likely to increase by between 80 and 90 percent, to between 2.05 and 2.17 US cents, up from 1.14 US cents last year.
“The increases in Eps and Heps for the current reporting period relative to the corresponding reporting period is largely as a result of a 38.4 percent increase in gold revenue to $183.8m compared to $132.8m in 2019,” Pan African Resources said.
The group presents its results in the dollars. It said that, during the current reporting period, the average dollarto-rand exchange rate was R16.26, compared with R14.70 at the end of December 2019.
The closing exchange rate at the end of December was R14.70, while it was R14.08 at the end of last year.
Last year, Pan African Resources reported a 125.8 percent surge in profit after taxation to $21.9m, due to the improved production performance at Evander Mines, while its revenue increased by 36.2 percent to $132.8m.
Pan African Resources’ shares closed 1.08 percent higher at R4.70 on the JSE yesterday.