Boston, MA 05/21/2014 (wallstreetpr) – Kinross Gold Corporation (USA) (NYSE:KGC) reported first quarter results ended March 31, 2014 with net earnings of $31.8 million or $0.03 per share with total revenue of $817.4 million.
First quarter results
In the first quarter 2014 (1Q2014), Kinross’s revenue decreased by 23% to $817.4 million compared to $1,058.1 million in the same quarter 2013 (1Q2013) due to the lower average realized gold price of $1,299 per ounce (1Q2013: $1,624 per ounce).
During 1Q2014, Kinross produced higher gold of ~665K attributable Au eq. oz., compared to prior year period with the addition of higher grade ore from new processing unit at Dvoinoye. The growing volume increased the production costs of sales of $727 per Au eq. oz (1Q2013: $729) and all-in sustaining cost to $1,001 per Au eq. oz. sold (1Q2013: $1,030).
Lower revenue and associated operating costs impact the Company’s adjusted net earnings significantly to $34.1 million or $0.03 per share during 1Q2014 (1Q2013: $172.4 million with adjusted EPS of $0.15).
The decreasing earnings and lower change in working capital reduced the adjusted operating cash flow to $239.0 million or $0.21 per share (1Q2013: $413.7 million or $0.36 per share). But, lower capital spending at Tasiast decreased the Company’s capital expenditure to $168.9 million (1Q2013: $309.5 million). However, higher debt repayments ($654 million) reduced the available net cash to $704 million as of March 31, 2014.
Kinross increased its financial flexibility with total liquidity of $2,238 million including $1,474 million of available credits. Net debts were $1,327 million as of March 31, 2014.
2014 outlook
Kinross intends to expand the Tasiast project to a level of 38K tonnes per day with an assumption of average realized price of $1,350 per ounce that will help to increase the production capacity at lower costs and improve the future cash flow per share considerably.
With the Tasiast expansion projects, Kinross expects production of 2.5-2.7 million Au eq. once, and production cost of sales of $730-780 per Au eq. oz. of sold and all-in sustaining costs are ranging from $950-$1,050 per gold ounce sold in FY2014. Accordingly, Kinross Gold Corporation (USA) (NYSE:KGC) provided the guidance for capital expenditures of $675 million in FY2014.
