Why the OceanaGold (ASX:OGC) share price is slumping 9%

The OceanaGold (ASX:OGC) share price is tanking nearly 9% in today's trading session after the company released its full-year report.   

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

Investors have been quick to dump their OceanaGold Corp (ASX: OGC) shares today. At the time of writing, the OceanaGold share price has tanked nearly 9% in Friday's trading session after the company released its full-year report.   

What's impacting the OceanaGold share price?

Earlier today, the OceanaGold share price fell by more than 11% after the company released its full-year financial report for the year ended 31 December 2020.

For the year, OceanaGold reported a loss of US$150.4 million compared to a US$14.5 million profit achieved in the year prior. A 23.2% fall in revenue of US$500.1 million for the year contributed to the loss.

OceanaGold attributed the fall in revenue to limited sales and lower annual production. Overall, the company fell to a loss after revenue was unable to offset the cost of sales and higher depreciation costs.

For the full year, OceanaGold reported consolidated production of 301,675 ounces of gold. The company managed to sell 310,531 ounces at an all-in sustaining cost (ASIC) of US$1,278 an ounce.

Despite the dour full-year performance, OceanaGold highlighted a strong performance in the fourth quarter. The company reported a 57% increase in production for the fourth quarter of 99,155 gold ounces.

Outlook

OceanaGold is a multinational gold producer. Its portfolio of operating assets include the Didipio mine in the Philipines, Macreas and Waihi operations in New Zealand and the Haile gold mine in the United States.

On the back of a strong fourth quarter, OceanaGold touted an optimistic outlook for 2021, upgrading its full-year gold production guidance. It advised expected production for 2021 is in the range of 340,000 to 380,000 ounces at an ASIC of between US$1,050 to US$1,200 an ounce.

The company attributed the increased guidance to production resuming at the Waihi operation and higher gold sales from the Haile gold mine. OceanaGold's Martha underground project at Waihi recently entered production, whilst its Golden Point project at the Macraes operation and the Haile gold mine are expected to commence production later this year.

OceanaGold President and CEO Michael Holmes attested to the revised guidance. He stated, "These three projects alone are expected to deliver more than a 75 per cent increase in production relative to 2020 at decreasing costs and increasing margins.".

Based on the current OceanaGold share price of $2.01, the company commands a market capitalisation of around $155 million.

Motley Fool contributor Nikhil Gangaram 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.

More on Share Market News

An analyst wearing a dark blue shirt and glasses sits at his computer with his chin resting on his hands as he looks at the CBA share price movement today
Opinions

Expert's verdict on 3 ASX 200 shares (2 have doubled in value and the other has lost 29%)

Two of these stocks were the best performers of their sectors in FY25. Should you buy, hold, or sell?

Read more »

A male ASX 200 broker wearing a blue shirt and black tie holds one hand to his chin with the other arm crossed across his body as he watches stock prices on a digital screen while deep in thought
Share Market News

5 things to watch on the ASX 200 on Wednesday

Here's what to expect on the Australian share market today.

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX managed to bank a small rise this Tuesday.

Read more »

Sport trainer talking to little girl who is climbing wooden ladder in gym.
Share Gainers

Why Vault Minerals, Droneshield, Westgold Resources shares are climbing higher today

These shares are gaining on Tuesday, but why?

Read more »

A hipster-looking man with bushy beard and multiple arm tattoos sits on the floor against a sofa reading a tablet with his hand on his chin as though he is deep in thought.
Share Market News

ASX 200 slides on unexpected RBA interest rate call

The ASX 200 is tumbling on the RBA’s latest interest rate announcement.

Read more »

A young woman smiles as she rides a zip line high above the trees.
Financial Shares

5 best ASX 200 financial shares of FY25 (CBA didn't make the cut!)

These stocks were well and truly 'in the black' for share price growth last financial year.

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Beetaloo, Botanix, Cobram Estate, and Origin Energy shares are falling today

These shares are having a poor session on Tuesday. But why?

Read more »

Two parents and two children happily eat pizza in their kitchen.
Broker Notes

Morgans reveals 4 ASX All Ords shares to buy now — and 2 may surprise you

The top broker has revealed a buy rating on four ASX All Ords shares from different market sectors.

Read more »