Gold Road share price lifts as half-year profit doubles

The Gold Road Resources Ltd (ASX: GOR) share price is in the green after the company released its half-year earnings this morning.

The S&P/ASX 200 Index (ASX: XJO) stock opened 2.4% higher at $1.285 before continuing on its upwards trajectory.

At the time of writing, the Gold Road share price is $1.295, 3.19% higher than its previous close.

Gold Road share price gains as profit and dividend doubled

Here are the key takeaways from the company’s results for the six months ended 30 June:

• Revenue from gold sales reached $196.5 million – a 51.6% improvement on that of the prior corresponding period (pcp)
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) lifted 67.8% to $100 million
• Consolidated net profit after tax (NPAT) lifted 108.9% to $39.9 million
• Basic earnings per share (EPS) came in at 4.52 cents – up from 2.17 cents
• Operating cash flow rose 50.1% to $69.5 million
• Declared 1-cent fully franked interim dividend – double that of the pcp

Gold Road sold 79,606 ounces of gold in the first half of 2022.

Its 50%-owned Gruyere mine produced a record 156,811 ounces of gold last half, with an all-in sustaining cost (AISC) of $1,376 per ounce.

The company ended the period with a record $160.3 million of cash and short-term deposits and no debt.

What else happened in the first half?

The major news from Gold Road last half was of its ultimately successful takeover of formerly-ASX-listed DGO Gold. As of 30 June, Gold Road held a 97.86% interest in DGO Gold shares. The acquisition of the remaining stake was made compulsory earlier that month.

DGO Gold investors were provided 2.25 Gold Road shares for each stock they held in the acquisition target, representing an implied price of $2.95 per share at the time of the offer.

Via the acquisition, Gold Road received a 14.4% stake in De Grey Mining Limited (ASX: DEG), a 6.1% stake in Dacian Gold Ltd (ASX: DCN), a 20.1% shareholding in Yandal Resources Ltd (ASX: YRL), and a diverse portfolio of exploration tenements.

What did management say?

Gold Road CEO and managing director Duncan Gibbs commented on the company’s half-year earnings, saying:

The six months to 30 June 2022 has been a successful one for Gold Road, despite the challenging global operating environment.

Gruyere achieved record production for the half year in line with our outlook of growing production through 2022 and 2023. The record gold production resulted in strong free cash flow for Gold Road and a record net cash position.

The successful completion of the DGO Gold takeover in June now provides Gold Road with an even more exciting platform for growth.

What’s next?

The company looks set to achieve its 2022 guidance.

Gruyere is on target to achieve between 300,000 ounces and 340,000 ounces in 2022 and to grow annual production to 350,000 ounces a year by 2023.

The company’s annual AISC guidance is still between $1,270 an ounce and $1,470 an ounce.

Gold Road share price snapshot

Despite Gold Road’s strong recent performance, its share price has struggled through 2022 so far.

It has dumped 18% since the start of the year. It’s also trading 0.4% lower than it was this time last year.

For comparison, the ASX 200 has fallen 8% year to date and 7% over the last 12 months.

The post Gold Road share price lifts as half-year profit doubles appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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