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(Sharecast News) - Pan African Resources reported a 10% increase in profit to $44.6m for the six months ended 31 December on Wednesday, despite a 13% decline in gold production.
The AIM-traded firm said revenue remained steady at $189.3m, down 1% from the prior-year period, as a higher gold price offset the impact of a synthetic gold forward sale transaction and lower production.
Earnings per share rose 10.3% to 2.35cents, while headline earnings per share fell 43.7% to 1.2cents.
Net debt increased to $228.5m, primarily due to the construction of the Mogale Tailings Retreatment (MTR) operation and the consolidation of debt from the Tennant Consolidated Mining Group (TCMG) acquisition.
The company paid a $23.7m dividend in December.
Gold production for the period declined 3.3% to 84,705 ounces.
Output was impacted by delays in commissioning the Evander Mines subvertical shaft, though that was partially offset by early MTR production.
The company reaffirmed its full-year guidance of 215,000 ounces, up 16% from the prior year, adding that it expected improved production in the second half.
TCMG in Australia was expected to contribute 48,000 to 60,000 ounces in fiscal 2026.
All-in sustaining costs rose to $1,675 per ounce from $1,295 per ounce, affected by lower underground production, power supply issues at Barberton Mines, and a stronger South African rand.
The company said it expected costs to improve in the second half, with guidance between $1,450 and $1,500 per ounce.
Pan African said it was continuing to advance growth projects, including expanding MTR's capacity and developing TCMG.
The Nobles Gold processing plant in Australia was meanwhile progressing ahead of schedule, with first gold expected in the fourth quarter.
It also noted potential for increased dividends after the financial year-end, as it expected to significantly reduce debt within the next 12 to 18 months.
"We believe Pan African is in an excellent position to capitalise from record gold prices, with high margins, a stable and growing production profile, and the group being materially unhedged from March 2025," said chief executive officer Cobus Loots.
"At prevailing gold prices, we anticipate the group to de-gear completely in the next 12 to 18 months, allowing us to re-invest, to grow and continue to provide sector-leading returns to shareholders.
"The group will revisit its dividend policy with regards to dividends post year-end, should current gold prices be sustained."
At 1010 GMT, shares in Pan African Resources were up 0.31% at 37.72p.
Reporting by Josh White for Sharecast.com.
