Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


OceanaGold posts first-half profit on strong first-quarter

OceanaGold posts first-half profit on strong first-quarter, Didipio

By Jonathan Underhill

July 31 (BusinessDesk) - OceanaGold, which operates the Macraes goldfield in Otago, posted a first-half profit as its Didipio operation in the Philippines helped lift first-quarter earnings to a record, making up for a small loss in the second quarter blamed on higher New Zealand costs and weaker sales.

Net profit was US$56.8 million in the six months ended June 30, from a year-earlier loss of US$63 million, which included some of 2013's US$193.3 million of impairments against its New Zealand assets, the Melbourne-based company said in a statement. Sales rose to US$297.8 million from US$226.9 million a year earlier, it said.

The mining company achieved a profit of US$58.9 million in the first three months of the year as production from Didipio came onstream, lifting sales by 78 percent. In the second quarter, sales fell 2.7 percent to US$127 million and were eclipsed by cost of sales, depreciation and amortisation, and other expenses amounting to about US$129 million.

OceanaGold attributed the second-quarter loss to "lower revenue from lower overall sales and higher costs in New Zealand due to a higher New Zealand dollar and a drawdown of inventory and gold-in-circuit."

“We had a strong start to the first half of the year with free cash flow generation of US$71 million including US$22 million in the second quarter despite a lower quarter for production,” said chief executive Mick Wilkes. The company was on track to achieve its 2014 guidance, he said.

The shares fell 8.2 percent to $3.58 on the NZX and have surged 128 percent this year. In that time the spot price of gold has gained about 16 percent.

Total production in the first half was 147,399 ounces of gold and 11,185 tonnes of copper including 60,831 ounces of gold and 4,706 tonnes of copper in the second quarter.

The Didipio operation produced 45,266 ounces of gold and 11,185 tonnes of copper in the first half, with much of the output achieved in the first quarter of the year, the company said. Production was expected to be lower in the second quarter because of the timing of extraction of lower grade ore and maintenance and is expected to pick up in the third quarter, it said.

In New Zealand, gold production was 102,133 ounces in the first half, down from 115,263 ounces a year earlier. That mainly reflected a decline in the second quarter of the latest year, which the company said was due to "lower grade ore mined and processed across the New Zealand operations and to lower mill feed at Reefton." Less ore was mined at Reefton towards the end of the second quarter because instability of a pit wall temporarily affected access, it said.

"Reduced ore feed will continue in the third quarter while an alternate access in the open pit is established," the company said. "As a result, production at Reefton for the third quarter and full year will be lower than expected."

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

f work for Pumpkin Patch staff

Retail: Pumpkin Patch Brand, IP Sold To Catch Group

The receivers of failed children's clothing retailer Pumpkin Patch have confirmed that the company's brand and intellectual property have been sold to Australian online retailer Catch Group. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news