Ramelius (ASX:RMS) lowers production guidance; how are shares responding?

Highlights

• Ramelius expects its gold production for FY22 to fall marginally short of the current guidance range.

• The target has been downgraded to 255,000 to 260,000 ounces.

• Ramelius would confirm actual results for FY22 in the June quarterly report.

Ramelius Resources Ltd (ASX:RMS) on Thursday announced that it expected its gold production for FY22 to fall marginally short of the current guidance range due to more persistent rain than forecast.

The production estimate for FY22, based on gold outturns received this week and updated road haulage and head grade estimates, has been downgraded to 255,000 to 260,000 ounces from the current guidance range of 260,000 to 265,000 ounces.

“Due to more persistent rain than forecast, especially recently, on some of the haulage routes to both the Mt Magnet and Edna May operations, ongoing staff shortages due to the COVID-19 pandemic/influenza and a lower-than-forecast head grade from Tampia,” Ramelius said in its latest ASX filing.

“This is despite the best efforts of the Ramelius and contractor teams in a challenging operating environment across the Western Australian resources industry,” the ASX-listed gold miner Ramelius added.

The company also said that there was currently no reason to expect a change from the previously provided range of AU$1475 to AU$1525 an ounce, though likely at a higher end.

Ramelius said that it would confirm actual results for FY22 and provide guidance for FY23 when the June quarterly report is released later in July.

Ramelius’ share price snapshot

Following this update, shares of Ramelius were trading at AU$1.01, down 7.16%. In the past year, the stock has fallen over 41%. The share price has fallen nearly 34% on a year-to-date (YTD) basis. The stock is down over 24% in the past month.

Ramelius’ half-year results

For the half-year ending 31 December 2021, Ramelius shared the following results:

• Earnings before interest, tax, depreciation and amortisation (EBITDA) were down 3% to AU$187.7 million compared to the prior corresponding period (pcp)
• Net profit after tax (NPAT) fell 10% to AU$73.4 million
• Sales revenue declined 9% to AU$310.1 million
• Net cash and bullion fell 29% to AU$164.5 million
• Gold production slipped 8% to 132,605 ounces.

The company’s board didn’t announce any interim dividend for the period, which was in line with the past practice.

RELATED ARTICLE: NHC, WHC, YAL, CRN: How are these ASX200 coal stocks performing

RELATED ARTICLE: CLW, PAC: Two ASX income shares with over 5% dividend yields