Yamana Gold Slips To Loss In Q4, Cuts Dividend By 42%

(RTTNews) - Canadian gold miner Yamana Gold Inc. (AUY, YRI.TO) on Tuesday reported a loss for the fourth quarter, reflecting an impairment charge as well as lower production and realized metal prices.

Both revenue and adjusted earnings per share for the quarter missed analysts' estimates. In addition, the company lowered its quarterly dividend by 42 percent, partly reflecting margin reductions due to lower metal prices.

Yamana Gold's net loss for the fourth quarter was $583.94 million or $0.78 per share, compared to net income of $169.16 million or $0.22 per share in the similar quarter last year. Net loss for the latest quarter includes an impairment charge of $535.8 million, net of taxes in respect to certain mineral properties.

Adjusted earnings for the quarter were $36.72 million or $0.05 per share, compared to $197.37 million or $0.26 per share in the year-ago period. On average, fourteen analysts polled by Thomson Reuters expected the company to earn $0.07 per share for the quarter. Analysts' estimate typically excludes one-time items.

The latest quarter's results reflect lower realized metal prices, lower volume of gold and copper sales, higher cash costs, and an equity loss from the company's 12.5 percent of interest in Alumbrera.

Revenues for the quarter declined 33 percent to $420.66 million from $629.51 million in the corresponding quarter last year. Analysts had a consensus revenue estimate of $483.93 million for the quarter.

Total production for the quarter was 303,768 gold equivalent ounces or GEO, down 6 percent from 322,990 GEO produced in the year-ago period. Total production for the quarter consisted of 260,187 ounces of gold and 2.2 million ounces of silver, compared to 276,373 ounces of gold and 2.3 million ounces of silver produced in the same period last year.

The company's sales volume for the quarter included 218,223 ounces of gold, 2.1 million ounces of silver, and 34.5 million pounds of copper, excluding Alumbrera which is accounted for as an equity investment. In the year-ago quarter, sales included 258,978 ounces of gold, 2.3 million ounces of silver, and 37.1 million pounds of copper, excluding Alumbrera.

Lower revenues and mine operating earnings were primarily due to lower metal prices in addition to lower volume of gold and copper sales. Lower metal prices accounted for 58 percent of the variance in revenues compared to the year-ago period and representing about $0.16 per share in earnings.

The average realized price of gold in the quarter decreased 24 percent to $1277 per ounce, while average realized price of copper declined 5 percent to $3.37 per pound and average realized price of silver was down 33 percent to $20.63 per ounce.

For fiscal 2013, Yamana Gold's net loss was $446.25 million or $0.59 per share, compared to net income of $442.06 million or $0.59 per share in the previous year. Net loss for the year includes an impairment charge of $574.2 million, net of taxes in respect to certain mineral properties.

Adjusted earnings for the year were $273.36 million or $0.36 per share, compared to $694.33 million or $0.93 per share in the prior year.

Revenue for the year declined 21 percent to $1.84 billion from $2.34 billion last year.

Street expected the company to earn $0.39 per share for the year on revenues of $1.93 billion.

In a separate statement, Yamana Gold said it declared a dividend of $0.0375 per share for the first quarter, to shareholders of record at the close of business on March 31, 2014, payable on April 14, 2014. This represents an annualized dividend of $0.15 per share, down from the previous annualized dividend of $0.26 per share.

Yamana Gold said it is committed to the sustainability of dividends that are partly determined by the margins achieved, current and future cash flows, and the expectation that margins and cash flow are sustainable in current or future metal price environments.

The company noted that the rapid change in metal prices the past year has significantly compressed margins, not withstanding mostly successful efforts to reduce costs.

Yamana Gold said, "The decision to declare the dividend at the current level takes into account the margin reduction since late 2012 because of lower metal prices. It also takes into account a need to balance distributions to shareholders with the capital needs of prospective and high quality opportunities."

AUY closed Tuesday's regular trading on the NYSE at $10.53, down 0.04 or 0.38 percent on a volume of 7.38 million shares. In after-hours, the stock further shed $0.07 or 0.66 percent to $10.46.

On the Toronto Stock Exchange, YRI.TO closed Tuesday's trading at $11.52, down $0.11 or 0.95 percent on a volume of 1.67 million shares.