AngloGold Ashanti Ltd. (AU: Quote,AGD.L), a gold producer incorporated in South Africa, reported Monday a decline in second-quarter profit as the benefit of higher prices were more than offset by lower production and increased cash costs. The company also backed its fiscal 2012 production forecast and declared a dividend.
Second-quarter profit attributable to equity shareholders plunged to $287 million or $0.61 per share from last year's $470 million or $0.85 per share. Adjusted headline earnings, which excluded certain items, were $0.65 per share, compared with $0.89 per share in the previous year.
Revenue declined to $1.68 billion from $1.70 billion in the prior-year quarter. Of this, gold income increased to $1.62 billion from last year's $1.58 billion.
Production during the quarter was 1.073 million ounces, lower than last year's 1.09 million ounces, yet topped guidance on strong performances from Continental Africa and Americas as well as a recovery from the South African operations, which experienced fewer safety-related stoppages. Total cash costs of $801/ ounce grew from last year's $705/oz, better than guidance due to improved production and weaker local currencies.
The South African operations' production was hurt by power-tariff increases in South Africa, increased seismic activity in the West Wits area, geological constraints and lower yields and inflationary pressures. However, the Americas and Australasia regions produced more gold than last year.
The company's gold price received increased 6 percent to $1,607 per ounce from last year's $1,510 per ounce.
AngloGold Ashanti Chief Executive Officer Mark Cutifani said, "It was a strong operating quarter and we've kept our projects firmly on track. We've been driving this business hard to sustainably deliver industry-leading returns and we're continuing on that path."
Moving ahead, for the third quarter, production is expected to be around 1.07 million ounces to 1.1 million ounces at a total cash cost of $835/oz - $865/oz.
Further, the company continues to expects full-year 2012 production of 4.3 million ounces - 4.4 million ounces at a total cash cost of $780/oz -$805/oz.
Additionally, AngloGold Ashanti's Board has declared a dividend of 100 South African cents per share, or about 12 cents per share, for the second quarter, in line with previous guidance.
AU shares closed Friday's trading at $33.89, up $0.28 or 0.83 percent.
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by RTT Staff Writer
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