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Eldorado Gold's 1st-Quarter Earnings Disappoint

- By Alberto Abaterusso

After the closing bell on Thursday, Eldorado Gold Corp. (EGO) posted first-quarter results.

Revenue of $80 million missed expectations by $32.28 million. The company also recorded an adjusted earnings loss of 11 cents per share, which was 7 cents short of estimates.

The disappointing results send shares down 9.73% to $3.71 in early trading on Friday.


Due to shipment delays at the Efemcukuru deposit in Turkey and a 5.1% drop in the gold price to $1,265 per ounce, revenue declined 39.3% year over year. Along with higher costs, this caused the miner to post an adjusted loss of $17.9 million and operating cash outflows of $9 million.

Gold production, which includes 19,678 ounces from the pre-commercial production phase of the Lamaque metallic project in Canada, decreased 7.2% to 82,977 ounces as a result of disruptions during heap leaching at the Kisladag mine in Turkey.

The company's third producing asset is Olympias in Greece.

The all-in sustaining cost rose 29% to 1,132 per ounce and the total cash cost increased 9% to $652 per ounce.

As of March 31, Eldorado has $477.5 million in total liquidity, of which 47.6% is available in cash on hand and securities and 52.4% in undrawn lines of credit. It has $596.5 million in debt.

In a statement, President and CEO George Burns said that "the company expects to generate significant free cash flow over the next several quarters."

For full 2019, the Canadian miner reaffirmed gold production of 390,000 ounces to 420,000 ounces.

On Thursday the bullion closed at $1,270.95 per troy ounce on the London market. In April, it averaged $1,286.44 an ounce, up 1.7% from the average price Eldorado realized in the first quarter.

The closing share price of $4.1 on Thursday declined 19% over the past year to below the 50-day simple moving average line. The price is close to the 100-day line and above the 200-day line. The market capitalization is $656.93 million.

The 52-week range is $2.52 to $6.05.

The 14-day relative strength index of 40 suggests the stock is still far from oversold levels.

Wall Street issued a hold recommendation rating with an average target price of $6.78.

Disclosure: I have no positions in any securities mentioned.

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This article first appeared on GuruFocus.