Ramelius share price slips following 90% profit plunge

Ramelius posted earnings today.

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Key points

  • Ramelius posted FY22 earnings today 
  • The company saw a wind-back in performance, particularly at the bottom line 
  • In the past 12 months, the Ramelius share price has slipped more than 43% into the red 

The Ramelius Resources Limited (ASX: RMS) share price is sliding into the red today following the release of its FY22 earnings results.

At the time of writing, the Ramelius share price is 4% down at 86.5 cents apiece.

Ramelius slides as profits get a haircut

Key takeaways from the company's results include:

  • Gold production of 258,625 ounces down 5% year on year
  • All-in sustaining cost (AISC) of A$1,523 per ounce, up 16% from FY21
  • Revenue from ordinary activities of $603.9 million down 5% year on year
  • EBITDA of $208.1 million for the year, down 39% from last year's result
  • Statutory net profit after tax (NPAT) of $12.4 million down 90% year on year
  • Underlying NPAT of A$73.0 million, down 40% from FY21
  • Fully franked dividend of 1.0 cent per share

What else happened last period for Ramelius?

The company recognised a step backwards on the growth front. Gold production was lower at Mt Magnet due to lower grade and higher input costs.

Although, higher gold prices mitigated some of these negative factors, backed by higher production at Edna May following the introduction of ore from Tampia.

Ramelius has also introduced a Dividend Reinvestment Plan (DRP). Shareholders can now choose to reinvest their dividends into buying additional RMS shares.

"The reinvestment price is based on a 2.5% discount to the 10-day volume weighted average price after the date of election," the company said.

Management commentary

Speaking on the results, Ramelius Managing Director, Mark Zeptner said:

Despite the challenges faced across the industry last financial year, Ramelius has posted a solid set of underlying results for the period and remains in a secure, debt free, financial position.

While FY23 continues to present some uncertainty in terms of local and global inflationary pressures, we expect both our production centres to generate positive operating cashflows which will fund the exciting prospects we see at Penny, Rebecca and at Mt Magnet where the development pipeline continues to grow.

What's next for Ramelius?

For the 2023 financial year, Ramelius is forecasting gold production of 240,000–280,000 ounces. It hopes to achieve this at an ASIC of A$1,750–$1,950 per ounce.

In the past 12 months the Ramelius share price has slipped more than 43% into the red.

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 Scott Phillips.

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