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Key Highlights of Iamgold’s Q2 2018 Earnings

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IAG’s revenue growth

Iamgold (IAG) generated revenues of $277.4 million in Q2 2018, which represents a YoY (year-over-year) growth of 1.1%. Its higher realized prices and higher sales at its Rosebel mine were offset by lower sales volumes at its Essakane and Westwood mines. Its attributable gold production was 214,000 ounces, which was 4% lower than Q2 2017.

Planned mill maintenance and lower grades led to lower production at Rosebel, Essakane, and Westwood. IAG maintained its gold production guidance of 380,000–395,000 ounces for 2018.

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IAG’s financial highlights

Iamgold’s (GLD) margin for the second quarter was $487 per ounce, a decline of 5.6% YoY. It reported all-in sustaining costs of $1,077 per ounce, which was 10.5% higher YoY. Below are the main reasons for the increase:

  • lower production
  • planned maintenance at Essakane and Rosebel
  • weaker US dollar compared to the euro and the Canadian dollar
  • higher contractor costs at Essakane due to a long lead time for receiving mining equipment
  • higher energy costs
  • higher sustaining capital

IAG’s net operating cash flow in the second quarter was $51 million, which was 41% lower than Q2 2017. Adjusted net earnings attributable to equity holders were $13 million, or $0.03 per share, which was higher than $4 million, or $0.01 per share, in Q2 2017.

Peer results

Most of Iamgold’s peers have already reported their Q2 2018 results. Barrick Gold (ABX)Goldcorp (GG), and Agnico Eagle Mines (AEM) missed their earnings estimates. Agnico Eagle Mines missed it by a wide margin and reported EPS of $0.01 compared to the consensus estimate was $0.08. Goldcorp and Barrick Gold reported EPS of $0.02 and $0.07, respectively, and missed the estimates of $0.06 and $0.04, respectively. They released their results on July 25 after the market closed.

Newmont Mining (NEM), on the other hand, reported an earnings beat. Yamana Gold’s (AUY) Q2 2018 earnings were in line with the market expectations.

In the next few parts of this series, we’ll analyze the performance of Iamgold’s mines.

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