TORONTO – Iamgold Corp. (TSX:IMG) reported lower fourth-quarter earnings on Wednesday as its CEO vowed to improve operating and share price performance.
The Toronto-based gold miner said its net earnings were $84.6 million, or 22 cents per share during the last three months of 2012.
That’s a 37 per cent drop from the $133.6 million, or 36 cents per share it earned during the same 2011 period.
Revenues dipped to $468.4 million from $481.6 million a year earlier.
Adjusted net earnings, a better indication of Iamgold’s underlying performance, were $90.3 million, or 24 cents per share, a 16 per cent drop from the same 2011 quarter when the company posted earnings of $107.8 million, or 29 cents per share.
The adjusted earnings were in line with the 24 cents per share analysts polled by Thomson Reuters had been expecting.
Gold production was 214,000 ounces in the quarter, down from 253,000 a year earlier, due to lower grades at the Essakane mine in Burkina Faso and stockpiling of ore at Mouska in Quebec.
Niobium production was flat at 1.2 million kilograms.
Cash costs for the quarter rose to $731 per ounce, compared to $643 per ounce a year earlier.
“Operating performance was solid, but it needs to be better.” said president and CEO, Steve Letwin.
Despite lower grades at core gold assets and disappointing performance at joint-venture operations, production wasn’t too far from Iamgold’s targets, he said.
Cash costs were also in line with expectations, but 2013 is shaping up to be a challenging year on that front.
“We have a lot of work to do. Our recent share price is not acceptable, and we are determined to improve performance,” said Letwin, calling 2013 a “transitional year.”
“We have to be more innovative in our assault on costs.”
Letwin said the company will have to invest in expansions in order to reduce costs, but it won’t commit capital to projects unless they meet targeted returns on investment.
“Our financial position remains strong with $1 billion in cash and bullion and nearly $2 billion in liquidity.”
Net earnings for all of 2012 were $334.7 million, or 89 cents per share, down 14 per cent from a year earlier on higher costs of sales and exploration expenses.
Adjusted net earnings for the year were $316.9 million, or 84 cents per share, down 22 per cent from 2011.
Annual revenues were more-or-less flat at $1.7 billion.
Gold production for the year fell seven per cent to 830,000 ounces.
Niobium output was 4.7 million kilograms, up two per cent from 2011.
Shares in Iamgold, which reported results after markets closed, sank six per cent to $7.57 on the Toronto Stock Exchange Wednesday.