The S&P/ASX 200 Index (ASX: XJO) stock Evolution Mining Ltd (ASX: EVN) has doubled in the past year, and the ASX gold share recently reported an impressive set of numbers in its FY25 half-year result.
The company's HY25 result was a record performance, which seemingly really impressed investors.
Evolution Mining said it is seeing the "benefits of the foundations laid during FY24 resulting in consistent and reliable delivery in FY25".
Let's have a look at what the company reported in the six months to 31 December 2024.
Earnings recap for the ASX 200 stock
The ASX 200 stock reported that its underlying operating profit (EBITDA) rose 77% to $1 billion, underlying net profit jumped 144% to $385 million, and statutory net profit after tax (NPAT) soared 277% to $365 million. Group cash flow rocketed higher by 420% to $273 million.
This increased profitability gave the board of directors the confidence to hike the dividend per share by 250% to 7 cents.
Evolution Mining also noted its balance sheet deleveraging continues, with gearing reducing to 23%, down from 30% in the first half of FY24. It's targeting gearing of 20% by the end of FY25.
The business said it remains on track to deliver FY25 production guidance of between 710,000 to 780,000 ounces of gold and between 70,000 to 80,000 ounces of copper.
Evolution Mining also said it expects to achieve a sector-leading all-in sustaining cost (AISC) of between $1,475 and $1,575 per ounce.
Can the Evolution Mining share price keep rising?
Management certainly seems confident of a pleasing outlook for the ASX 200 stock. The Evolution managing director, Lawrie Conway, said:
With spot prices well above the achieved prices in the first half and the business well placed to deliver on FY25 guidance, we are on track to generate over $2 billion of operating cash flow for the year, which will continue to see improved returns to our shareholders
According to a collation of analyst recommendations by Commsec, there are currently two buy ratings, 11 hold ratings, and seven sell ratings. So, while the average recommendation is a hold, it seems investors are leaning more negative than positive.
A large part of the company's financial performance can be attributed to the pleasing gold price movement. In Australian dollar terms, the ASX 200 stock said its achieved gold price rose 29% to A$3,875.
Could the gold price keep rising? The broker UBS said after seeing the gold price reach US$2,900 per ounce:
Yes we believe so. We have brought forward the expected peak to later in 2025 and increased the short-run forecast average prices by ~US$200/oz, now seeing potential for a peak of US$3,200/oz. This call for even higher prices is driven by: 1) deep-rooted bullish sentiment, with gold seen as a safehaven asset amid a highly uncertain and volatile macro environment, 2) continued lack of investor positioning, and 3) stronger-than-expected official sector demand.
We are also lifting our long-term gold price to US$2,200/oz from the US$1,950/oz level we've had since Jun-24. This implies a nominal price of ~US$2,500/oz from 2029 and takes into account higher production costs and capex, as well as the assumption that gold maintains its wider investor base and remains a core part of asset allocations. For investors who are concerned about long-term themes, such as fiat currency debasement, further deterioration in the US fiscal deficit, and geopolitical/sanctions risks, we think gold should continue to attract interest as an alternative asset.
UBS currently has a price target of $6.04 on the ASX 200 stock, implying it doesn't think it'll rise any more over the next 12 months. Time will tell what happens.
