Randgold & Exploration mining suffering big losses
RANDGOLD & Exploration reported a disappointing set of results for the year to end December.
Randgold & Exploration, an investment holding company with assets in the mining industry, yesterday reported a loss from operating activities of R22.5 million for the year from a R6.7m operating loss from the prior year.
The company warned the market about the expected losses in a trading update released on March 10. It said the reason for the expected material decrease in earnings and headline earnings per share in the current financial period was as a result of low level of recoveries during the current reporting period and an increase in expenditure.
In the period, the company said its net asset value also (NAV) decreased by 4.76 percent from R2.34 a share at December 31, 2015 to R2.23 a share at 31 December 31, last year.
To improve on its operational performance in the year ahead, the company is also expecting to cut down on operational loss in order to have a healthy balance sheet.
The firm said, however, it expected a better set of financial results at the end of this year and said it had recovered assets from third parties.
“The 2016 group results reflected a total comprehensive loss for the year of R7.9m as compared to R5.4m profit in 2015. This was mainly as a result of an increase in legal fees. During the year income was derived primarily from third party recoveries of R6.4m and interest of R14.4m earned on cash investments. “The company spent R6.4m on personnel costs; R18.3m on legal and forensic fees, up from R11.5m in 2015 and other operational costs totalled R4.8m,” the company said.
The company’s headline loss per share was 12 cents per share as compared with headline earnings per share of 1 cents a share in 2015. Despite reporting losses, Randgold said its cash and cash equivalents were healthy. The company started the year under review with cash and cash equivalent balance of R175.9m and by the end of the year had R170m. It said it remained liquid with no interest bearing debt.
The group said its cash outflow of R5.9m were the net result of interest earned on cash and recoveries received less cash utilised to fund its operations during the year. The board announced that it would hold its annual general meeting on May 16 in Sandton.