Caledonia Mining (CMCL) Q4 2014 earnings summary

Executive summary

• FY2014 revenue fell to C$59.1m from C$65.1m, reflecting lower gold sales and realized prices; attributable profit was C$4.9m versus a C$3.1m loss in 2013.

• Adjusted EPS was 12.1 cents, while IFRS EPS was 9.3 cents; adjusted earnings excluded items including FX, impairment and deferred tax.

• The Revised Plan targets stable 2015 production of ~42koz, with production growth expected from 2016 as access to deeper, higher-grade areas improves.

Financial highlights

• Revenue declined 9% to C$59.1m; gross profit was C$24.4m versus C$33.2m, and EBITDA was C$16.2m versus C$25.4m.

• Operating profit increased to C$13.3m from C$9.5m; profit after tax was C$6.6m versus a C$0.5m loss.

• FY2014 cash from operating activities was C$13.7m; net capital investment was C$6.8m and year-end cash was C$26.8m.

• Gold revenue fell 15% to US$53.5m; total precious-metal revenue was US$53.5m, down 15% YoY.

Outlook and guidance

• 2015 gold production target reaffirmed at ~42koz; H2 production is expected to exceed H1 due to more production days.

• The Revised Plan projects production increases from 2016; No. 6 Winze is scheduled for first production in January 2016, with full 500t/day production in H2 2017.

• 2015 on-mine costs are expected to remain stable; cost per ounce is not expected to fall materially until higher output spreads fixed costs.

• 2015 earnings could benefit from lower head-office G&A and tax charges; further earnings improvement is expected from 2016 as production rises.