Australian metal and mining company, Independence Group NL (ASX: IGO) has released its 2Q FY19 and First Half Results Presentation. In the first half of FY 2019, the company reported Underlying EBITDA of A$131 Million which was 2 percent lower than the previous corresponding period. At the end of the first half of FY 2019, the company had Cash of A$208 million and debt of A$114 million. During the period, the company paid a fully franked FY18 final dividend of 2 cents. Further, the Board declared a Fully franked FY19 interim dividend of 2 cents which will be paid on 1 March 2019.
At the end of half-year FY 2019, the company had Net Cash from Operating Activities of A$163 million which was 46% higher than the previous corresponding period. The operating cash flow was increased due to improved sales volumes from Nova and Tropicana, together with A$38M in Nova cash receipts relating to FY18 sales received in early 1H19. The company also received Receipt of A$12 Million relating to the sale of Dacian Royalty in 1H19. During the first half, the company repaid the debt of A$29 Million.
As per the company’s release, Nova revenue and earnings increased significantly due to 77 percent higher metal sold as the Operation was ramped up to nameplate capacity in 1H19. Further, the Tropicana revenue and earnings were driven by a 5% increase in gold sold and a 3% reduction in cash costs.
In the second quarter of FY 2019, the company’s net cash increased by 52% to A$94 million as compared to the previous quarter. In the Q2 FY 2019, the company reported an Underlying EBITDA A$68 Million and Underlying FCF of A$29 Million.
During the quarter, the company experienced substantial growth in the Nova production with a rise of 11 percent in the nickel production and 30 percent reduction in cash cost. The Tropicana mine delivered 9% increase in gold production and 18% reduction in AISC in Q2 FY 2019 as compared to the prior quarter. According to the company, Nova and Tropicana are on track to make full-year guidance after delivering 1H19.
In the second quarter of FY 2019, the company reported Revenue and Other Income of A$189 million which is 13 percent higher than the previous quarter. The increase in the revenue was driven from higher gold sales which were offset by lower nickel prices QoQ.
The company has informed that it is going to adopt a new shareholder returns policy which will aim to return 15-25% of FCF (Free Cash Flow) to shareholders. During Q2 FY19, the company completed the earn-in component of the Lake Mackay JV with Prodigy Gold NL.
In the past six months, the share price of the company decreased by 5.59 percent as on 30 January 2019. IGO’s shares traded at $4.380 (+3.791% intraday) with a market capitalization of circa $2.49 billion as on 31 January 2019.
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