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Acacia Mining says it successfully stabilised its business in 2018

Production for 2018 was above guidance but the year's revenue total was 12% lower than in the year before
Acacia miners at the Bulyanhulu mine
Acacia miners at the Bulyanhulu mine

Acacia Mining plc (LON:ACA) told investors it successfully stabilised its business through 2018, whilst highlighting annual gold production above previous guidance.

The miner said it produced 521,980 ounces of gold in the year, versus guidance for 435,000-475,000 ounces.

Whilst flagging the strong operating performance, it noted that at 520,380 ounces gold sales for the year were broadly in line with annual production volumes, but, below the 592,883 ounces sold in 2017.

READ: Acacia Mining beats production target despite Tanzania export ban

Revenue (unaudited) for the year amounted to US$664mln and was down 12% from the preceding year although the company noted that the impact of lower sales was somewhat offset by better gold prices.

Similarly, earnings (EBITDA) were down 12% at US$226mln, albeit net earnings remained positive at US$59mln compared to 2017’s US$707mln net loss.

Non-core asset sales in the year supported the cash position, with around US$130mln available at the end of the year.

It noted that it contributed some US$127mln of taxes and royalties to Tanzania during the year, and, spent more than US$273mln with Tanzanian suppliers.

“We were able to return the company to free cash flow generation in the second quarter of the year, a trend which was sustained during the second half, ending the year with a net cash position of US$88 million,” said Peter Geleta, Acacia’s interim chief executive.

“At the same time, we continued to demonstrate our long-term commitment to Tanzania and its mining industry.”

Acacia’s business has had to adjust, following government-led reforms and regulations related to Tanzania’s mining industry.

Russ Mould, AJ Bell investment director commented: “Today’s full-year results featured no nasty surprises although investors’ experiences of the last nine years could easily colour their judgement here."

In late morning trading, shares in Acacia Mining were 0.6% higher at 193.30p.

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