Gold mining operator Nordgold, a former subsidiary of Russia’s second largest steel-maker Severstal, saw its net results skyrocketed by 89% in 2011. The leap came as a result of increased production and higher gold prices.
After separating from its former parent company Severstal in December, Nordgold now reports in its first independent statement a significant growth of all key financials for 2011. The Company’s net profit stood at $252 million last year, compared to $133 million posted in 2010. Revenues were also up 57% year on year to reach $1.18 billion.
“Among the reasons for such top-rank growth we can distinguish two major factors – a 28% increase in gold production to 754 tons, and a significant price rise last year,” said Pavel Emelyantsev of Investcafe.
The average realized gold price was up 25% year on year and reached $ 1.567 an ounce in 2011, the Nordgold report says. Meanwhile, gold production rose on the back of “higher productivity in key business units,” as well as the August 2010 acquisition of Crew Gold Corporation, a company at the forefront of gold mining in South Greenland, the statement says.
Strong financials also reflected the company’s “ability to create significant value from emerging market assets,” said Philip Baum, Chairman of Nordgold. Beyond Russia, other operation destinations of Nordgold include Africa and Kazakhstan.
Nikolai Zelenski, CEO of Nordgold, was also upbeat, saying he expected the strong performance to continue in 2012.
“Looking ahead to our first year as a public company, we expect record production of 800-850 koz in 2012 and we anticipate declaring a maiden dividend at the time of the interim results,” he said.
Efficiency of Nordgold operations was one of the key reasons for separating the company into an independent unit, Emelyantsev recalls. “It’s a pity Nordgold shares aren’t traded on Russia’s bourses,” the analyst concluded.