Profits slide 54% in FY21 sending Gold Road (ASX:GOR) share price tumbling on Monday

Shares in the gold miner are sliding today after the company's full-year results.

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Key points

  • Gold Road Resources shares are falling today following the company's earnings release
  • Gold Road reported mixed results with profits and free cash flow both declining substantially over the year
  • In the last 12 months, the Gold Road Resources share price has spiked 36%

The Gold Road Resources Ltd (ASX: GOR) share price is lower today after the company released its financial results for the full year ended 31 December 2021.

At the time of writing, the Gold Road Resources share price is trading at $1.64, a 2.95% drop from the open this morning.

Gold Road share price jumps on earnings growth

Key takeouts from the company's earnings results on Friday include:

  • Revenue from gold sales of $274.8 million, down from 2020 result of $294.7 million
  • Average realised gold price of $2,210 per ounce on this revenue, down from $2,330 last year
  • Gold sales of 124,335 ounces, down from 126,434 ounces year on year
  • EBITDA for the 12-month period totalled $120.2 million, down from $170.6 million in 2020
  • EBITDA margin of 44%, down 14 percentage points from 2020 margin of 58%
  • Consolidated net profit after tax (NPAT) for the 2021 financial year of $36.8 million, down from $80.8 million in 2020
  • 0.5 cents per share dividend fully-franked declared
  • Basic earnings per share (EPS) of 4.18 cents – 9.19 cents last year.

What else happened in 2021 for Gold Road?

Earnings were a mixed result for Gold Road as sales came in stronger but didn't pull through further down the income statement.

Much of this was seen at the operating level as operating cash flow for the 12 months was $89.2 million, down from $142.7 million in 2020.

As a result, the company's margin on EBITDA of 44% was down 14 percentage points from the 2020 margin of 58%.

Not surprisingly, NPAT thinned by 54% year on year to just $37 million as earnings were compressed throughout the year.

Consequently, EPS was less than half of 2020's result and group free cash flow for 2021 was $22.1 million, a substantial decrease from $105.5 million last year.

Management commentary

Speaking on the group's full-year results, Gold Road Managing Director and CEO Duncan Gibbs said:

The year 2021 saw a significant increase in attributable reserves and resources, and positive progress from our exploration efforts at Yamarna. Net profit after tax was $36.8 million for 2021. The Company continued to return income to shareholders in the form of six-monthly dividend payments, and the Board has determined to pay a dividend for the six-months to 31 December 2021 of 0.5 cents.

What's next for Gold Road?

The company says it has a "strong production outlook" in the coming periods. Its Gruyere asset remains on target to "grow annual production to a sustainable 350,000 ounces per annum by 2023", the company says.

Meanwhile, it reports its attributable Ore Reserves "grew to 2.23 million ounces, whilst attributable Mineral Resources grew to 4.71 million ounces during 2021".

Gold Road share price snapshot

In the last 12 months, the Gold Road Resources share price has spiked 36% and is up 6% year to date.

TradingView Chart

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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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