Earnings plummet 54% in FY21, sending Gold Road (ASX:GOR) stock price plummeting on Monday

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the Gold Road Resources Ltd (ASX: GOR) the stock price is down today after the company released its financial results for the full fiscal year ended December 31, 2021.

As of this writing, Gold Road Resources stock price is trading at $1.64, down 2.95% from the open this morning.

Gold Road stock price jumps on earnings growth

Key results from Friday’s company results include:

  • Gold sales revenue of $274.8 million, down from 2020 result of $294.7 million
  • Average realized gold price of $2,210 per ounce on these earnings, down from $2,330 last year
  • Gold sales of 124,335 ounces, compared to 126,434 ounces year-on-year
  • EBITDA for the 12-month period totaled $120.2 million, down from $170.6 million in 2020
  • EBITDA margin of 44%, down 14 percentage points from the 58% margin in 2020
  • Consolidated net income after tax (NPAT) for fiscal 2021 of $36.8 million, down from $80.8 million in 2020
  • 0.5 cents per share fully franked dividend declared
  • Basic earnings per share (EPS) of 4.18 cents – 9.19 cents last year.

What else happened in 2021 for Gold Road?

Earnings were mixed for Gold Road as sales increased but failed to advance lower in the income statement.

Much of this was seen at the operational level, as cash flow from operations for the 12 months was $89.2 million, compared to $142.7 million in 2020.

As a result, the company’s EBITDA margin of 44% was down 14 percentage points from the 2020 margin of 58%.

Unsurprisingly, NPAT fell 54% year-over-year to just $37 million as profits were squeezed throughout the year.

Consequently, EPS was less than half of the 2020 result and the group’s free cash flow for 2021 was $22.1 million, a substantial decrease from $105.5 million last year.

Management commentary

Speaking on the group’s annual results, Gold Road Managing Director and CEO Duncan Gibbs said:

2021 saw a significant increase in attributable reserves and resources, and positive progress from our exploration efforts at Yamarna. Net profit after tax was $36.8 million for 2021. The company continued to return income to shareholders in the form of semi-annual dividend payments, and the board of directors decided to pay a dividend 0.5 cents for the six months ending December 31, 2021.

What’s next for Gold Road?

The company says it has “strong production prospects” in the coming periods. Its Gruyère asset remains on track to “increase annual production to a sustainable level of 350,000 ounces per year by 2023,” the company says.

Meanwhile, it reports that its attributable ore reserves “increased to 2.23 million ounces, while attributable mineral resources reached 4.71 million ounces in 2021.”

Gold Road Share Price Overview

Over the past 12 months, Gold Road Resources’ share price has climbed 36% and is up 6% year-to-date.

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