Join our daily newsletter At The Bell to receive exclusive market insights
- Mining company OceanaGold (OGC) has seen its earnings decrease in the company’s first quarterly report of 2020
- The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) fell from US$64.4 million (approximately A$100.18 million) in 2019’s first quarter to US$42.4 million (around A$65.95 million)
- The lower EBITDA resulted from lower overall gold sales from Oceana’s mines in New Zealand and the Philippines
- Looking forward, the company expects a recent five-week lockdown at its New Zealand operations will impact its second-quarter performance
- However, by ramping up production in the second half of the year, the company still expects to meet its full-year guidance
- Despite the report, OceanaGold shares are 1.09 per cent higher today, trading for $2.79 per share in midday trade
Mining company OceanaGold (OGC) has seen a drop in its first-quarter financials and predicts further damages in the next quarter.
The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) fell from US$64.4 million (approximately A$100.18 million) in 2019’s first quarter to US$42.4 million (around A$65.95 million).
This resulted in a quarterly net loss of US$26 million (approximately A$40.44 million), versus a net profit of US$12.4 million (roughly A$19.29) million in the previous corresponding period.
OceanaGold attributes the drop in earnings to lower overall gold sales from its mine in New Zealand.
Furthermore, operations at OceanaGold’s Didipio mine in the Philippines remains halted, which also contributed to the earnings drop.
However, these losses were partially offset by a bump in the gold spot-price over the first three months of the year.
Looking forward, the company expects its second-quarter results to also be adversely impacted.
Mining operations throughout New Zealand were recently halted for five weeks, due to government-mandated quarantine restrictions.
As a result, OceanaGold predicts that second-quarter production will also be lower than in previous quarters, particularly at the company’s New Zealand mines.
However, OceanaGold hopes to increase production in the second half of the year, to offset the losses seen in its first two quarters.
In doing this, the company expects to remain on track to meet its full-year production guidance.
However, Michael Holmes, President and CEO of OceanaGold, said this could change, given the pandemic’s ongoing and unpredictable effects on the mining industry.
“We maintain our 2020 guidance, however, we acknowledge that the continued risks associated with COVID- 19 remain elevated and could further impact our operational performance.
“We will continue to monitor these risks while strictly enforcing the protocols and safeguards we have in place at each of our operations which have proven successful to-date,” he said.
Despite the report, OceanaGold shares are 1.09 per cent higher today, trading for $2.79 per share in midday trade.
