The Evolution Mining Ltd (ASX: EVN) share price is among the worst performing stocks today even as it unveiled its best interim net profit in its history.
The Evolution share price crashed 7.9% to a 10-month low of $4.31 this morning. This makes the gold miner the third worst performer on the S&P/ASX 200 Index (Index:^AXJO).
Record profits sink Evolution share price
But it seems good isn’t good enough when it comes to Evolution. The miner posted a 57% uplift in underlying net profit to $234 million for the six months to end December 2020.
The strong gold price and bigger margins helped drive the result. Earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved 6% to 52%, which puts it around the top of the sector.
However, revenue only increased by a more modest 9% as the higher gold price was offset by a drop in volume sold.
Not all good news
Also, the increase in EBITDA margin isn’t related to operating costs as that was roughly flat compared to the previous period.
While management was also touting its strong cash generation prowess from favourable tailwinds, group cash flow declined by 10% to $218.1 million.
The record result also wasn’t enough to convince management to boost its interim dividend. That remains flat at 7 cents a share.
Flat dividend as cash drops
To be frank, the dividend decision isn’t a big deal. No one buys an ASX gold miner for income. Even if Evolution did lift its dividend, it would make little difference to total shareholder returns.
Also, given the drop in cashflow, it is probably prudent for management to hold on to the cash.
Having said that, Evolution’s half year results may not be the only factor pressuring the Evolution share price.
Metal fatigue hits ASX gold shares
The spot gold price fell 0.3% to US$1,788 an ounce and some gold traders are predicting more falls for the precious metal.
This is because the yellow metal failed to hold above US$1,800 an ounce and that could invite more selling pressure.
Other ASX gold miners are also on the nose this morning, although not quite to the same extent as Evolution.