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Here’s why the Sandfire Resources (ASX:SFR) share price is soaring

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The Sandfire Resources Ltd (ASX: SFR) share price is on the rise in morning trade. At the time of writing, shares in Sandfire Resources are up 7.35% to $5.99. 

We take a look at Sandfire’s results for the financial half-year ending 31 December (H1 FY21) below.

What financial results did Sandfire report?

Sandfire’s share price is moving higher today. This comes after the ASX copper and gold producer reported a 13.6% lift in sales revenue to $355.6 million. Up significantly from $313.1 million in H1 FY20.

It was reported that cash flow from the company’s operating activities increased by 26.3% year-on-year to $137.8 million.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) for its DeGrussa Operations segment came in at $238.0 million, a 30.6% increase on the $182.2 million reported in the prior corresponding period.

Additionally, Sandfire reported a 78% increase in net profit after tax (NPAT). This equated to $60.8  million, up from $34.2 million in H1 FY20. Basic earnings per share increased 65% year-on-year to 34.1cents.

As at 31 December, the company had $335.8 million cash. In particular, Sandfire had no debt and a global investment portfolio close to $90 million. The company credited the strong balance sheet with production and cost management at its DeGrussa Operations in Western Australia along. Additionally, the Sandfire also credited a big rise in copper prices.

Management commentary

Commenting on the results, Sandfire’s managing director, Karl Simich, said:

This has been another standout performance, with our low-cost, high-margin Western Australian mining operations capitalising on the improving copper price and the Company taking important steps towards its vision of creating a diversified, multi-operational mining house…

The announcement of a Final Investment Decision for the US$259 million development of the T3 Motheo Mine in Botswana is a significant milestone for the Company and represents our first mine development outside DeGrussa – and one of the few significant new copper mines currently being developed anywhere in the world.

Due to this performance, Sandfire will pay an interim dividend of 8.0 cents per share (cps) fully franked. This is up from 5.0 cps paid in H1 FY20.

Share price snapshot

Taking today’s intraday gains into account, Sandfire shares are up 27% over the past 12 months. By comparison, the All Ordinaries Index (ASX: XAO) is down 0.4% at that same time.

Year-to-date the Sandfire Resource’s share price is up 8.5%.

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Motley Fool contributor Bernd Struben 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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