Iamgold profit slides on lower revenue, higher costs
TORONTO (miningweekly.com) –TSX-listed Iamgold this week reported significantly lower third-quarter revenue and earnings, saying lower prices for gold and higher operating costs were to blame.
The miner on Tuesday said during the three months ended September 30, net earnings attributable to shareholders fell 68% year-on-year to $25.3-million, or $0.07 a share, compared with net earnings of $78-million, or $0.21 a share.
Revenue fell 13% to $293.5-million, down from $336.2-million, as lower gold prices were partially offset by a higher volume of sales.
The cost of sales for the third quarter was $218.3-million, up $33.1-million compared with the same period a year earlier, mainly owing to higher operating costs of $27-million and higher depreciation expense of $9.7-million, which was partially offset by lower royalties of $3.6-million, arising from a lower average realised gold price.
"We had a good quarter despite the challenging environment in our industry," Iamgold president and CEO Steve Letwin said.
He pointed to a programme the company launched in the first quarter to reduce its yearly operating costs by $100-million, without cutting jobs, before the current lower gold price environment took hold.
"This programme has been highly successful to date, as costs have been lowered by $77-million. As a result, our third-quarter cash costs and all-in sustaining costs were well within guidance and we expect to meet our cost reduction targets for the year,” he said.
He added that while Iamgold remained optimistic about the long-term prospects for gold, the company was “prudently planning” for a lower gold price environment.
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