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B2Gold Tumbles on 4th-Quarter Results

- By Alberto Abaterusso

B2Gold Corp. (BTG) was down 2.89% at $3.02 in early trading on Wednesday following the release of fourth-quarter and full-year 2018 results.

The Canadian miner posted non-GAAP earnings of one cent per share for the final quarter of the year, missing estimates by one cent.

B2Gold's revenue grew 56.4% from the prior-year quarter to $272.12 million, missing expectations by $2.36 million.


For the full year, B2Gold recorded the following year-over-year changes.

Gold revenue increased 92% to $1.23 billion, the gross profit grew 143% to $364.7 million and the operating income skyrocketed 153% to $219.5 million. As a result of impairment charges, the net income attributable to shareholders declined to $29 million, or 2 cents per diluted share. The adjusted net income more than tripled to $162 million, or 16 cents per share.

In addition, the operating cash flow almost doubled to $450.9 million.

The strong performance was due to record annual consolidated production of 953,504 ounces of gold, which was up 51% from 2017, and significantly lower cash operating and all-in sustaining costs.

A 0.96% increase in the average realized gold price to $1,262 per ounces, which was applied to record sales of 970,409 ounces, also contributed to the company's performance.

The 10th consecutive year of record annual consolidated production of gold was possible thanks to the first full year of commercial production at the Fekola mine in Mali and to a record annual gold output of 216,498 ounces from the Masbate mine in the Philippines.

The operating cash costs decreased 8.7% to $495 per ounce, determining a 12% decline in the all-in sustaining cost to $758 per ounce. This improvement was the result of fixed costs being spread over a larger base of metal produced.

Looking ahead to 2019, B2Gold guides production of 935,000 to 975,000 ounces of gold at cash operating costs of $520 to $560 per ounce and all-in sustaining costs of $835 to $875 per ounce.

In addition, B2Gold targets organic growth through expansion of its existing mines and through the progression of its exploration and development projects. The company is conducting a metallurgical study to expand the capacity of the mill at Fekola and is assessing the possibility to expand the resources at Fekola and at the El Limon mine.

The closing share price of $3.11 on Tuesday followed a 6% increase over the past year through March 12. The stock is trading above the 200, 100 and 50-day simple moving average lines. The 52-week range is $2.1 to $3.35. The market capitalization is $3 billion.

Wall Street issued a buy recommendation rating with an average price target of $5.17 per share of B2Gold.

Disclosure: I have no positions in any securities mentioned.

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This article first appeared on GuruFocus.