St Barbara (ASX:SBM) share price weakens after a fall in production

The St Barbara Ltd (ASX: SBM) share price is slipping in early trade after the gold miner reported some mixed results for the half-year.

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Gold Bullion Sinking 16.9

The St Barbara Ltd (ASX: SBM) share price is falling this morning after the gold miner released its half-year results. By the look of the numbers, it was a bit of a mixed bag for the 6-month period.

At the time of writing, the St Barbara share price is trading 4.35% lower at $2.20.

Here are the numbers for St Barbara

The gold miner reported a statutory profit after tax of $37 million, down from the $39 million bagged last year. On the other hand, the underlying profit increased 14% to $40 million from $35 million. The key difference between these figures is that statutory profit is the accounting-based profit, whereas underlying is more of an internal profit that excludes some accounting items such as impairments.

St Barbara’s gold production was also down from the previous corresponding period. Production was 162,660 ounces during the recent half, compared to 165,921 last year. Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) margin came in at 42%.

Furthermore, global operations contributed a net cash contribution of $100 million. The miner benefitted from a stronger gold price during the period, resulting in the flat result, despite the fall in production.

The result comes with the announcement that St Barbara will pay a 4 cents per share dividend fully franked. Payment will be on 24 March, with the ex-date (cutoff) being 2 March.

CEO commentary

Commenting on the results, St Barabara CEO Craig Jetson said:

This financial result represents an encouraging recovery from the operational disappointments of the first quarter, with improving contributions from all three operations.

Over consecutive halves, Atlantic Gold has delivered record production as continuous improvements in mill throughout generated early returns. St Barbara is in a strong financial position that affords us the opportunity to support growth projects across all three of our operating jurisdictions.

In the coming months we will provide an update on the sulphide feasibility study at Simberi, the Leonora Province plan and submit environmental impact statements for Atlantic Gold’s growth projects.

Despite the cash inflows, St Barbara’s cash levels are hovering around $118.7 million at the end of the half. This is in contrast to the $405.5 million in cash the company held at the end of June 2020.

St Barbara share price snapshot

The gold miner’s share price has slipped 15.4% over the last 12 months. However, from the March 2020 low of $1.665, the share price has rallied 38%. St Barbara now holds a market capitalisation of $1.6 billion.

To give a bigger picture view, the gold price per ounce has dipped roughly 2% in the last 12 months.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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