Caledonia Mining (CMCL) Q4 2016 earnings summary

Executive summary

• FY 2016 record gold output and higher realised prices lifted revenue 27% to $62.0m, EBITDA 122% to $19.7m and net profit 98% to $11.1m YoY.

• Strong operating cash flow of $23.0m supported $19.9m of investment, $3.0m in dividends and an increase in cash and equivalents to $14.3m.

Financial highlights

• FY revenue was $62.0m vs $49.0m; operating profit $19.0m vs $8.5m; profit before tax $18.8m vs $8.0m.

• FY gross profit rose 78% to $23.5m; profit attributable to owners rose 78% to $8.5m.

• Q4 revenue increased to $15.3m from $11.8m; EBITDA to $5.8m from $1.7m; net profit to $3.9m from $2.0m.

• FY basic EPS was 15.8 cents vs 8.9 cents; adjusted EPS was 21.4 cents vs 8.8 cents, up 143%.

Outlook and guidance

• FY 2017 production guidance is 60,000 oz; on-mine costs targeted at $600–$630/oz and AISC at $810–$850/oz.

• Target remains 80,000 oz by 2021; management expects lower unit costs as throughput rises and grade trends toward 4 g/t.

• Capital expenditure of $18m is budgeted for 2017 and $8m for 2018 to complete the Central Shaft; expenditure is expected to fall from 2018 onward.

• Cash position is expected to improve if current gold prices are sustained; dividend continuity and resilience to lower gold prices remain priorities.