LONDON (Alliance News) - Highland Gold Mining Ltd Wednesday cut its interim dividend after reporting a substantial fall in profit in the first half of the year after an increase in gold sales and lower operating costs failed to offset the fall in gold prices.
The Russian gold miner reported a huge fall in pretax profit in the first six months of 2015 to USD16.6 million from USD29.4 million a year earlier as revenue dropped to USD130.7 million from USD142.2 million after the company was hit by lower gold prices.
Earnings before interest, tax, depreciation and amortisation rose to USD54.9 million from USD48.4 million, driven mainly by the devaluation of the rouble and its "strong cost performance" which pushed its Ebitda margin up to 42% from 34%.
However, Highland lowered its interim dividend to GBP0.020 per share from GBP0.025 per share a year ago.
Gold sales experienced a small lift to 119,277 ounces in the period from 116,567 ounces and the company slashed its all-in-sustaining cash cost to only USD710 per ounce of gold from USD900 at the end of June 2014 after making efficiency improvements and ramping up production.
That was in response to lower gold prices in the period, which averaged only USD1,088 per ounce in the half compared to USD1,210 per ounce a year earlier, representing a 10% decline year-on-year.
Production in the half totalled 121,242 ounces, up almost 1% from 120,121 ounces a year earlier.
Highland shares were down 2.6% to 54.05 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.