Pan African forecasts increase in 2020 headline share earnings of up to 97%

PAN African Resources forecast “a considerable improvement” in annual share earnings owing to a one quarter increase in revenue and reversal of an impairment.

Headline earnings a share would be between 2.23 and 2.35 US cents for the 12 months ended June 30 compared to 1.19c/share in the 2019 financial year – an increase of up to 97%, Pan African said in a trading statement today.

Earnings per share is to be as much as 22% higher.

Gold revenue for the period was $273.7m, 25.9% higher than in the 2019 financial year, the company said. Gold sold increased marginally to 173,864 ounces notwithstanding the interruptions posed by Covid-19 related lockdowns.

The major factor, however, was the gold price: the price received was 24.3% higher year-on-year at some $1,574 per ounce compared to $1,266/oz in 2019. This implies further upside in Pan African’s financial performance in the current financial year as the dollar gold price has shown a base of around $1,900/oz.

An impairment charge reversal of $100,000 net of tax for the year was also booked but was excluded from headline earnings, the firm said.

Pan African said in July in an update that it would be net cash this year and intended to increase dividends assuming elevated rand gold prices.

Net debt had been reduced 49% to $62.5m as of June 30 compared to $123.7m on December 31. “We are especially please to report that the rate of de-gearing has exceeded previous guidance,” said Cobus Loots, CEO of Pan African in the previous update.

Production for the current year has been put at about 190,000 oz assuming no interruptions as a result of disease infections.

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