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Where Investors Stand on IAMGOLD’s Transformation

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Part 2
Where Investors Stand on IAMGOLD’s Transformation PART 2 OF 7

Understanding IAMGOLD’s 3Q17 Earnings Highlights

IAG’s revenue growth

IAMGOLD (IAG) produced 217,000 ounces of gold in 3Q17, which represented a 3.0% YoY (year-over-year) rise. This growth is mainly attributable to the following factors:

  • the continued ramp-up of the Westwood mine, which contributed 17,000 additional ounces
  • higher grades and throughput at Rosebel, which contributed 3,000 additional ounces
  • higher production from the above two factors, partially offset by lower grades at Essakane and Sadiola

Understanding IAMGOLD’s 3Q17 Earnings Highlights

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While IAG’s production was higher YoY, its revenues fell 4.8%, mainly due to lower sales at Essakane. Investors should also note that the prior year also benefitted from the sale of 12,000 ounces of gold from carbon fines built up in inventory. Lower gold prices were also a factor contributing to lower revenues.

IAG’s financial highlights

The company’s gold (GLD) margin fell from $610 per ounce in 3Q16 to $513 per ounce in 3Q17. Its net operating cash flow was $77 million—down from $125.8 million in 3Q16. Net earnings attributable to equity holders came in at $34 million, or $0.07 per share. This was higher than its earnings of $21.8 million or $0.05 per share reported for 3Q16.

This growth in earnings was due to lower finance costs, gains on derivatives and warrants, higher interest income, and lower income tax expenses.

Peer New Gold (NGD) released its 3Q17 earnings on October 26, 2017. Its revenues beat market expectations, while earnings were in line. Eldorado Gold (EGO) released its 3Q17 results on October 27, 2017. Its earnings and revenues missed the analysts’ expectations. Yamana Gold (AUY) also reported 3Q17 results on October 27, 2017, beating market expectations.

In the next few articles, we’ll analyze the performances of IAMGOLD’s mines.

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