The Regis Resources Limited (ASX: RRL) share price has dipped into the red on Tuesday after the company reported its FY21 earnings.
Regis shares are now changing hands at $2.49 apiece, a 2.73% drop from the open.
Let's take a closer look.
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Regis Resources share price slumps after NPAT, dividend drop
Here's how the gold producer performed in FY21:
- Revenue of $819.2 million from sale of 367,285 ounces of gold, an 8% year-on-year increase
- Gross profit of $236.5 million, down from $304.6 million in FY20
- Earnings before interest, taxes, depreciation and a mortisation (EBITDA) of $403 million, up 2.3% on the year, on a margin of 49%
- Net profit after tax (NPAT) $146 million, a decrease of 27% from the year prior
- Profit before income tax (PBIT) of $212 million, down from $285 million a year ago
- Total dividend payout of $61.3 million, a 25% down-step from the $81.3 million paid out in the year prior
- Dividend of 7 cents per share in FY21, a 56% decrease from the 16 cents per share in FY20.
What happened in FY21 for Regis Resources?
The gold production company reported a mixed bag of results, which could potentially weigh in on the Regis Resources share price.
Firstly, Regis produced a total of 372,870 ounces of gold in FY21, a 6% increase from FY20. From this, Regis recognised an 8% year-on-year increase in revenue to $819 million, all from the sale of 367,285 ounces of gold.
The average realised price on these sales was $2,229 per ounce, up from $2,200 a year ago.
Despite the growth in revenue, Regis recognised a 22% decrease in gross profit to $236.5 million. This carried through to a decline in profit before tax of 26% to $212 million.
As a result, the company also recorded a 27% decrease in NPAT for the year, down from almost $200 million in the year prior.
All-in sustaining costs (ASIC) were also higher in FY21 at $1,372 an ounce versus $1,246 a year ago.
Regis also completed the 30% acquisition of the Tropicana Gold Project in Western Australia. The transaction was funded through a "$650 million equity raising and $300 million debt facility".
Group mineral resources expanded by 35% whereas the group ore reserves increased by 33% in FY21. The company also "commenced development" at the Garden Well underground mine in Western Australia.
Finally, one other point that could weigh in on the Regis Resources share price, is the declared final dividend of 3 cents per share. This brings the total FY21 dividend to 7 cents per share, fully franked, and represents a significant 56% down-step from the FY20 dividend of 16 cents per share.
What did management say?
Speaking on the results which could be affecting the Regis Resources share price, managing director Jim Beyer said:
Regis Resources has delivered another year of solid production for FY21 generating an EBITDA of $403 million, a net profit after tax of $146 million, a net profit after tax margin of 18% and operating cash flows of $276 million. While delivering this result, Regis executed a genuinely transformational transaction through the acquisition of a 30% interest in the Tropicana Gold project which delivers on our strategic objectives to grow as a safe, responsible, reliable, long-life, low-cost gold producer, generating strong financial returns.
What's next for Regis Resources?
There are a few projections that could affect the Regis Resources share price going forward.
Regis expects "a solid year of production at Duketon" in FY22, driven by the company's 30% interest in the Tropicana Gold Project.
Management sees gold production in the range of 460,000–515,000 ounces for the group in FY22 on an AISC of $1,290–$1,365/ounce.
It also sees growth capital of $155 million to $165 million, including open pit and underground mining costs.
Regis management notes that the "September quarter is expected to be soft" from "major mill shutdowns". It also sees a weak upcoming quarter from "pit rescheduling requirements" and rebasing into steady state production at its Rosemont site.
Regis Resources share price snapshot
The Regis Resources share price has struggled this year to date, posting a loss of 30% since January 1. It has also fallen about 50% over the last 12 months.
These results have lagged the S&P/ASX 200 index (ASX: XJO)'s return of around 25% over the past year.
