St Barbara share price higher despite reporting a sharp drop in half year profits

The St Barbara Ltd (ASX:SBM) share price pushed higher on Wednesday despite revealing a sharp drop in half year profits. Here’s why it pushed higher…

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The St Barbara Ltd (ASX: SBM) share price pushed higher on Wednesday.

The gold miner’s shares finished the day with a gain of 1.5% to $2.76.

Why did the St Barbara share price push higher today?

St Barbara’s shares were given a boost on Wednesday by another jump in the gold price, which appears to have offset a subdued reaction to its half year results.

Overnight, concerns over the impact of the coronavirus on global economic growth sent the gold price charging above the US$1,600 level again.

This led to gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) rising strongly on Wednesday. So much so, the S&P/ASX All Ordinaries Gold index finished the day with a solid 3.2% gain.

What about St Barbara’s results?

For the six months ended December 31, St Barbara posted an underlying profit after tax of $35 million. This was down by a sizeable 58% from $77 million in the prior corresponding period. This was driven by lower production during the period despite the addition of the Atlantic Gold operation. The company also reported a reasonably sharp jump in costs during the half.

St Barbara reported gold production of 181,728 ounces at a group all-in sustaining cost (AISC) of A$1,391 per ounce. As a comparison, a year ago the company reported 187,792 ounces at an ASIC of A$1,008 per ounce.

Despite this, the St Barbara board has maintained its interim dividend at 4 cents per share fully franked.

The company’s new CEO, Craig Jetson, explained: “I am excited to be in my third week at St Barbara. The financial result for this half is softer, due to the lower production previously reported at Gwalia and Simberi. Atlantic Gold has made a significant contribution to the Group on the back of its record gold production for the half.”

“With the three operations, St Barbara has a solid platform on which to build. In coming months we will complete the Gwalia Extension Project, provide an update on the sulphide study work at Simberi, and work continues on the Atlantic Gold growth assets. There is also targeted exploration near to all three operations, which I look forward to visiting in the coming weeks,” he concluded.

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