The Ramelius Resources Limited (ASX: RMS) share price edged higher on Monday following the release of an impressive full year result for FY 2020.
The gold miner’s shares ended the day 0.5% higher at $2.02. This means the Ramelius share price is now up 58% since the start of the year.
How did Ramelius perform in FY 2020?
During the 12 months ended 30 June 2020, Ramelius recorded a 17% increase in gold production to 230,426 ounces. Combined with a solid rise in the average realised gold price, this led to the gold miner delivering a 31% increase in revenue to $460.6 million.
And thanks partly to a reduction in its all-in sustaining cost (AISC) to A$1,164 an ounce, Ramelius’ earnings before interest, tax, depreciation and amortisation (EBITDA) margin expanded to 56%. Management notes that this is one of the highest margins among its peers. This margin expansion resulted in the company posting a massive 128% increase in EBITDA to $256 million.
On the bottom line it was even better, with net profit after tax growing 420% year on year to $113.4 million. As a result of this strong performance, a fully franked final dividend of 2 cents per share was declared.
Ramelius’ Managing Director, Mark Zeptner, commented: “This is the sixth consecutive year that Ramelius has posted a net profit after tax, which demonstrates the operating and financial strength of the Company, its quality assets and the success of our growth strategy.”
“It is very pleasing to also announce a 2.0c per share fully franked dividend after our record breaking year, building on the 1.0c per share dividend paid in October 2019. Ramelius is proud of the fact that it is now rewarding shareholders with a dividend yield, in addition to the significant share price growth achieved over the last 12 months.”
What about FY 2021?
Management expects to grow its production again in FY 2021 and is targeting 260,000 to 280,000 ounces. This represents an increase of 12.8% to 21.5% year on year.
One slight disappointment is the company won’t be capitalising fully on the recent gold price increase due to an expected increase in costs. Ramelius has provided AISC guidance of A$1,230 to A$1,330 an ounce. This will be a 5.7% to 14.3% increase year on year.
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