🕐04.02.13 - 16:54 Uhr

INVESTEC: RANDGOLD RESOURCES - RANDGOLD Q4 AND FY12A UPDATE - BUY




Randgold Resources RRS delivered a good 4Q and FY12A result, delivering a result largely in line with our expectations.

PBT was $568m (Investec $584m) and net income was $432m (Inv $430m).

Diluted EPS of $4.65/share was exactly in line with forecasts, while RRS is lifting the dividend to $0.50/share (Inv $0.48/share).

We were encouraged by good ongoing exploration results across most of the key project areas, lending confidence to life of mine extensions.

RRS appears confident that the Ivory Coast will back down on windfall tax plans. * Looking ahead we do not expect to make major changes to production or cost assumptions, although we will need to lift our FY13 capex spend assumptions.

The impact of this on near-term cashflow could be offset to some extent by a lift in medium-term production assumptions, given the increasing likelihood of a quicker than forecast start to Kibali.

* Outlook: RRS guides to higher production in FY13 but at higher costs: FY13 production guidance of 900-950koz (Investec 889koz) at cash costs of $700-750/oz (Inv $697/oz).

RRS remains confident of first production from Kibali in 4Q13.

We expect only to tweak our forecasts slightly. * On the downside, FY13 capex guidance of $670m is considerably higher than the $460m we had been forecasting.

The $210m difference partly reflects a $90m slower spend in FY12A ($562m actual vs $651m forecast), but also reflects higher construction capital at Kibali (now up 6% to $1.66bn for Phases 1 and 2) and higher expansion capital at the LGC.

* Valuation: Our target price is based on an equal blend of NPV and forward earnings multiples (20x FY 2013E, 12x EV/EBITDA), and currently under review pending a full analysis of the results.

The challenging multiples relative to peers reflect the company’s superior production growth, higher grades profiles and greater operational diversity.
To access the full note please click here Analyst: Hunter Hillcoat
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