Anglogold Ashanti Q1 Profit Plunges, Production Climbs; Stock Up - Update

(RTTNews) - Shares of AngloGold Ashanti (AU, AGD.L) climbed around 31 percent in the morning trading in London after the South African mining company reported a 17 percent jump in first-quarter gold production, while earnings declined sharply on lower revenues and prices. The company also issued production forecast for its second quarter.

For the first quarter, net profit attributable to equity shareholders plunged to $39 million from $239 million in the previous year. Earnings per share was 10 US cents, compared to 62 US cents in the prior year.

First-quarter adjusted headline earnings were $119 million, higher than last year's $113 million, while adjusted headline earnings per share of 29 US cents remained flat with last year.

Revenue for the quarter was $1.359 billion, down from $1.518 billion in the prior year. Earnings before interest, tax, depreciation and amortization or EBITDA dropped 7 percent to $476 million.

The company noted that production from most operating regions improved year-on-year, excluding the South Africa region, where marginal and loss-making ounces have been removed from the production profile. In addition, the region struggled with a slower-than-anticipated start-up after the Christmas break.

In the quarter, the company produced 1.06 million ounces of gold, an increase of 17 percent from last year's 899 thousand ounces of gold. International operations' production climbed 34 percent year-over-year to 765 thousand ounces, and Continental Africa's production went up 36 percent to 374 thousand ounces. Production in South Africa declined 11 percent to 290 thousand ounces.

Meanwhile, gold prices declined 21 percent to $1,290 per ounce from last year's $1,636 per ounce.

Total cash costs decreased 14 percent year-on-year to $770/oz, beating its guidance, benefited from higher output, and weaker currencies as well as with a range of cost saving initiatives that continue to gain traction.

All-in-sustaining cost fell 22 percent year-on-year to $993/oz on lower capex, cash costs and overhead costs.

Looking ahead, Anglogold expects gold production for the second quarter at 1.02 million ounces to 1.06 million ounces. Total cash costs are estimated at between $830/oz to $865/oz.

In London, Anglogold stock is gaining 338.74 pence or 30.80 percent, and trading at 1,438.74 pence.