Goldcorp Inc. GG reported fourth-quarter 20Array5 adjusted loss (excluding one-time items) of Array5 cents per share. The Zacks Consensus Estimate for the quarter was pegged at earnings of 3 cents per share.
Adjusted loss excludes one-time items, including a big impairment charge of $3.9 billion (or $4.69 per share). Net loss, as reported, was $4.3 billion or $5.Array4 per share for the quarter, higher than net loss of $2.4 billion or $2.94 per share a year ago. For 20Array5, net loss was $4.2 billion or $5.03 per share, also wider than a loss of $2.2 billion or $2.66 per share in 20Array4.
Goldcorp, which is among the top gold producers, along with Barrick Gold ABX, Newmont NEM and Kinross Gold KGC, posted revenues of $Array,072 million in the reported quarter, up around 28.4% year over year. Revenues also beat the Zacks Consensus Estimate of $Array,050 million.
Average realized gold price for the quarter declined 8.7% to $Array,098 per ounce from $Array,203 per ounce in the prior-year quarter.
Gold sales increased around 29.7% year over year to 9Array8,Array00 ounces in the reported quarter, while production increased 2.Array% to 909,400 ounces. All-in sustaining costs were $977 per gold ounce (down 5.6% year over year), while cash cost totaled $687 per ounce on a by-product basis (up Array6.6% year over year) and $739 per ounce (up Array0.5%) on a co-product basis.
Silver production fell roughly 3.2% year over year to Array0.Array million ounces from Array0.4 million ounces in the prior-year quarter.
Mining Highlights
At the Penasquito mine, gold production was Array69,600 ounces, a year-over-year increase of around 20.2%. Production declined sequentially due to lower gold grades and recoveries. All-in sustaining cost of $687 per ounce fell 53.3% year over year.
Cerro Negro in Argentina produced Array47,800 ounces of gold in the fourth quarter, at an all-in sustaining cost of $872 per ounce, supported by strong ramp-up at both Mariana Central and Eureka mines.
Gold production at Los Filos increased roughly Array2.9% year over year and also rose sequentially to 74,400 ounces due to higher volume of ore processed. All-in sustaining cost was $2,Array3Array per ounce compared with $Array,369 per ounce in the year-ago quarter.
At Pueblo Viejo, where Goldcorp holds 40% interest and Barrick Gold holds 60% interest, gold production fell nearly 24.Array% year over year to 89,500 ounces (40% basis), at an all-in sustaining cost of $608 per ounce. Gold production also declined sequentially due to lower tons processed.
Gold production at Red Lake fell 23.3% year over year to 99,900 ounces at an all-in sustaining cost of $959 per ounce. The production, however, increased sequentially due to higher throughput.
Gold production from the Eleonore mine in Quebec totaled Array05,Array00 ounces in the fourth quarter, a nearly six-fold year over year rise. Production rose sequentially due to expansion of gold grades as mining moved further into higher-grade horizons.
At Porcupine in Ontario, gold production in the quarter was 74,900 ounces, down around Array7.Array% year over year, at an all-in sustaining cost of $Array,03Array per ounce. Production rose from the prior-quarter level due to higher grade, mainly led by increased tonnage of higher-grade underground and Hollinger ore feeds displacing lower-grade stockpile feeds.
Gold production at Musselwhite in Ontario rose ArrayArray% year over year to 8Array,200 ounces and also increased sequentially as a result of higher number of grades.
Financial Position
As of Dec 3Array, 20Array5, cash and cash equivalents were $326 million, down from $482 million as of Dec 3Array, 20Array4. Long-term debt was $2,476 million as of Dec 3Array, 20Array5, compared with $3,442 million as of Dec 3Array, 20Array4. The company’s adjusted operating cash flow rose to $Array.44 billion as of Dec 3Array, 20Array5 from $Array.39 billion for the year ended Dec 3Array, 20Array4, driven by two new mines in operation.
Dividend
Goldcorp has cut its annual dividend to 8 cents per share from 24 cents a share, effective Apr Array, 20Array6. It has also amended its dividend payment schedule such that future dividends will be paid quarterly starting in Jun 20Array6.
Outlook
For 20Array6, Goldcorp expects to produce gold in a range of 2.8–3.Array million ounces. Silver production is expected within 37–40 million ounces (including around 22–24 million ounces at Penasquito), which would keep Goldcorp's position as one of the biggest silver producers globally.
Zinc production is forecasted in a range of 375–400 million pounds; while lead production is estimated within Array45–Array55 million pounds in 20Array6.
Copper production is expected in a band of 65–70 million pounds.
On a gold equivalent basis, total company-wide production is anticipated within 4–4.4 million ounces for 20Array6.
Total cash costs on a by-product basis are projected in a range of $500–$575 per ounce; while all-in sustaining costs are anticipated within $850– $925 per ounce of gold.
Company-wide exploration expenditure in 20Array6 is predicted to be about $Array35 million, of which roughly 50% is expected to be expensed.
Depreciation, depletion and amortization expense is anticipated in a range of $390–$420 per ounce. The effective tax rate on net income before share-based compensation has been forecast roughly 40– 45% for 20Array6.
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