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B2Gold (BTG) Q1 Earnings Miss Estimates, Revenues Up Y/Y

Zacks Equity Research

B2Gold Corp BTG reported first-quarter 2020 adjusted earnings per share of 10 cents, which missed the Zacks Consensus Estimate of 11 cents. However, the reported figure marked a substantial improvement from earnings of 3 cents reported in the prior-year quarter. The upside can be attributed to solid performances across all of the company's operations, particularly the Fekola Mine in Mali, and higher gold prices and low costs.

Including one-time items, the company reported earnings of 7 cents per share compared with 2 cents per share in the prior-year quarter.

B2Gold generated revenues of $380 million in first-quarter 2020, reflecting year-over-year growth of 44%. This upside resulted from an increase of 22% in the average realized gold price and an improvement of18% in gold ounces sold.

B2Gold Corp Price, Consensus and EPS Surprise

B2Gold Corp Price, Consensus and EPS Surprise

B2Gold Corp price-consensus-eps-surprise-chart | B2Gold Corp Quote

Operational Update

B2Gold’s consolidated gold production was 250,632 ounces in the reported quarter, 7% above the company’s budget. On a year-over-year basis, gold production was up 25% in the quarter under review. This can be attributed to solid performances across all of the company's operations, particularly the Fekola Mine in Mali.

The company reported record quarterly low consolidated cash operating costs of $367 per ounce in the reported quarter, 13% below the budgeted level and down 19% from the year-ago quarter. Consolidated all-in sustaining costs (AISC) of $695 per ounce were below budget by 14% and 6% lower than the prior-year quarter.

Financial Position

B2Gold’s cash and cash equivalents were $208 million at the end of first-quarter 2020 compared with $141 million at the end of 2019. The company recorded operating cash flow of $216 million for first-quarter 2020 compared with the $85 million in the prior-year quarter.

B2Gold has increased quarterly dividend by 100% to 2 cents per share. It will become effective upon approval and declaration of the second-quarter dividend in June 2020.
 
Outlook

B2Gold’s total consolidated production guidance lies in the range of 1,000,000-1,055,000 ounces of gold for fiscal 2020. Cash operating costs are projected be down 15% year on year to $415-$455 per ounce. Meanwhile, AISC is expected between $780 per ounce and $820 per ounce, down 7% from the year-ago level. For 2020, B2Gold anticipates to generate cash flows from operating activities of around $700 million factoring in a gold price of $1,500 per ounce. If gold prices go up to $1,700 per ounce, the company will generate cash flow of more than $800 million in 2020.

Based on the company's current life of mine plans, from the five-year period from 2020 to 2024, annual consolidated gold production is forecast to average 950,000 ounces with AISC averaging $825 per ounce.

Share Price Performance

 



Over the past year, B2Gold has gained 95.9% compared with the industry’s growth of 81.9%.

Zacks Rank & Other Stocks to Consider

B2Gold currently carries a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Newmont Corporation NEM, Barrick Gold Corporation GOLD and Wheaton Precious Metals Corp WPM, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Newmont has an expected earnings growth rate of 90.2% for 2020. The company’s shares have surged 103.6% in the past year.

Barrick Gold has an estimated earnings growth rate of 60.8% for the ongoing year. Its shares have soared 112.7% over the past year.

Wheaton has a projected earnings growth rate of 62.5% for the current year. The company’s shares have appreciated 107% in a year’s time.

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