Pan African Resources PLC said on Wednesday that its interim profit declined steeply as it battled against production constraints and rising costs.
The Rosebank-headquartered gold producer saw its pretax profit drop to $38.9 million for the six months that ended December 31, down 37% from $61.6 million in the prior year.
Revenue fell by 19% to $156.5 million from $193.6 million over this period on the back of dwindling production.
Gold production decreased by 15% to 92,307 ounces from 108,085 ounces, mainly attributable to troubles at its Barberton mines’ underground operations in Mpumalanga, South Africa.
Earnings per share and headline earnings per share were at $1.52, down 36% from $2.39.
The group said it had embarked on a number of restructuring initiatives to reduce its production cost in real terms.
It said it expected this, when combined with the electricity cost savings from large-scale solar photovoltaic renewable energy projects and anticipated increased production during the remainder of the 2023 financial year, to contribute to reducing unit production cost in the future.
All-in sustaining costs for six months to December 31 rose by 10% to $1,291 an ounce from $1,173 an ounce.
‘We believe that the tangible measures being implemented at these operations, as detailed in this announcement, will result in a significant improvement in production during the second half of the financial year and in the years ahead,’ the company said.
Going forward, the gold producer maintained full-year production guidance at between 195,000 ounces and 205,000 ounces for the financial year ending June 30. In 2022, output was at 205,459 ounces.
Its shares were down 1.4% at 14.79 pence on Wednesday afternoon in London, while its Johannesburg shares also lost 0.6% to R 3.24.
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