Golden profit for Lihir (2/1)

Written on the 2 March 2009

Golden profit for Lihir (2/1)


by Jason Oxenbridge


BRISBANE-based Lihir Gold Limited (LGL) has unearthed record profit of $109.3 million (Y/E 2008) with managing director Arthur Hood describing the gold market as a ‘true flight to quality’.

Record gold production and rising gold prices have enabled the company to report a 54 per cent increase and its third successive year of record production, at 882,000 ounces, an increase of 26 per cent from 2007.
Hood attributes the increase to significantly higher output at the cornerstone Lihir Island operation in PNG and because of the inclusion of production from the Bonikro mine in Cote d’Ivoire and the Mt Rawdon mine in Queensland. The mines were acquired by LGL as part of its acquisition of Equigold NL in June 2008.
Revenues increased by 52 per cent to a record $1.79 billion, driven by a 23 per cent increase in gold sales volume and a 29 per cent rise in the gold price. For the full year 868,927 ounces of gold were sold at an average cash price of $1326 an ounce, up from $1039 an ounce in 2007.
Despite a mining halt at its Lihir mine in PNG due to landowner disputes last year, the company resumed mining on January 30 and is this year anticipating record gold output from Lihir Island at between 770,000 and 840,000 ounces.

“The result is not just a function of price, but volume,” says Hood.
“Going into 2009, LGL’s financial position is very secure. We have healthy operating cash flows and widely diversified revenue and production sources. The company has a strong foundation to enable future investment in growth opportunities and to deliver maximum value for shareholders.”
In 2009 group-wide gold production is forecast to increase by more than 10 per cent to in excess of one million ounces. Falling oil prices and favourable exchange rate movements are expected to drive a reduction in total cash costs in 2009 to less than US$400 per ounce.
Hood says he is happy for the gold price to stay ‘exactly where it is’ in a volatile market where $50 per ounce fluctuations are possible.
“In 2008 we firmly established LGL as a global gold producer with growing production and exciting exploration opportunities. I’m confident the next 12 months will see a continuation in the group’s exciting growth journey,” says Hood.
Lihir did not declare a dividend.


Domino’s crust thicker with 14.5 per cent growth
BRISBANE’S Domino’s Pizza Enterprises Limited (DMP) has announced a strong half-year growth of 14.5 per cent above the corresponding period last year with net profit of $6.3 million.
Domino’s Pizza Enterprises CEO and MD Don Meij, says the company’s (NPAT) was up 2.8% to $6.3 million. He says the company will pay shareholders an interim fully-franked dividend of 4.4 cents per share, up 7 per cent on the dividend paid in the corresponding period last year.
“We have recorded solid performance for the first half of the 2009 and, as a result, Domino’s Pizza is on track to meet market guidance of an increase of 10%-15% in NPAT on full-year 2008,” says Meij.
“Europe has reported strong results including EBITDA up 35.7% on the same period last year. The interim dividend will be paid on 20 March 2009 with a record date of 2 March 2009. The Dividend Reinvestment Plan remains active but, as a benefit of DMP being in a strong capital position, the interim dividend will not be underwritten.”
Dominos added 15 stores, including two stadium stores, bringing the total number of stores in the network to 756. This included 11 stores in Europe and four stores in  Australia and New Zealand. The company’s organic store growth remains in line with expectations of adding 40 stores by full year 2009.
Looking forward, Meij says the company is experiencing strong momentum in sales with SSS growth of 5.2% in January 2009.
“Despite the economic downturn, customers are still appearing to be supportive of the fast food category,” he says.
“With the new menu launched in Australia on Monday, including three fresh premium pastas, three additional pizzas and a dessert, we believe we can continue to offer customers greater choices and value for money.”
DMP is Australia’s only publicly-listed pizza company and is the master franchisor for the Domino’s Pizza brand in Australia, New Zealand, France, Belgium and The Netherlands.
Super Cheap Auto races on
Super Cheap Auto Group has reported 9 per cent half yearly net profit increase after tax to $13.6 million.
The Directors have declared a fully franked interim dividend of 6.5 cents per share, an increase of 18% over the prior year. The dividend will be paid on 31 March 2009 with a record date of 9 March 2009.
Super Cheap Auto Group managing director Peter Birtles, says the results demonstrated the continued strong performance of both Supercheap Auto and its Boating Camping Fishing (BCF) franchise.
“Despite the widely reported downturn in retail conditions, both businesses have maintained their level of like for like sales growth without any changes to planned marketing and promotion programs,” says Birtles.
“The performance has been driven by a continued commitment to product range and inventory management, product development, store operational standards and supply chain efficiency.”
The company reduced net debt reduced by $12 million during the first half, despite $30 million being invested in new and refurbished stores. BCF sales increased by 30% to $101.6 million, reflecting the opening of six new stores and 6.8% like for like sales growth. EBIT increased by $3.1m (64.6%) to $7.9m.
Birtles says the second half of 2009 had started well for the Group.
“Like for like sales growth in Supercheap Auto has been more than five per cent, while BCF has delivered like for like sales growth in excess of 10 per cent, for the first seven weeks of the second half,” says Birtles.
“We continue to expect our businesses to grow their sales at a faster rate than the markets in which they operate. The Group plans to open one to two new Supercheap Auto stores, three to five BCF stores and one Goldcross store during the second half.
“Both Supercheap Auto and BCF are on track to slightly improve EBIT margins over the full year, while Goldcross is expected to report a negative EBIT contribution of around $2 million, reflecting the investment in business development and store set up costs.”

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