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Sandfire Resources (ASX:SFR) share price advances on record $170m net profit

The copper and gold producer just dropped its FY21 results…
The post Sandfire Resources (ASX:SFR) share price advances on record $170m net profit appeared first on The Motley Fool Australia. –

The Sandfire Resources Ltd (ASX: SFR) share price is in the green on Tuesday morning. This comes after the copper and gold producer reported its full-year results for the FY21 financial year.

At the time of writing, Sandfire shares are up 0.69% to $6.54.

Let’s take a look and see how the company performed for the period.

Sandfire Resources share price jumps on record result

The Sandfire Resources share price accelerated after the company delivered another record result for the 12 months ending 30 June 2021. Here are some of the highlights:

Total sales revenue of $813 million, up 24% on the prior corresponding period;

Earnings before interest, taxes, depreciation and amortisation (EBITDA) of $449.8 million, up 32.7%;
Net profit after tax (NPAT) of $171.6 million, up 132%;

Earnings per share (EPS) of 96.3 cents, up 124.4%; and
Fully franked final dividend of 26 cents per share, up 86%, bringing the total dividend for FY21 to 34 cents per share.

What happened in FY21 for Sandfire Resources?

Sandfire attributed the robust result to increased copper prices which hit decade-long highs during the year. Coupled with the company’s low-cost performance at the DeGrussa operations in Western Australia, this led to bumper profits.

Annual production for FY21 came in at 70,845 tonnes of copper, and 39,459 ounces of gold. C1 costs stood at US$0.82 per pound.

The group ended the period with a cash position of $573.7 million, almost double this time last year. This came from the senior leadership team making substantial investments in exploration and future growth projects in FY21.

What did management say?

Managing director Karl Simich touched on the results possibly pushing the Sandfire Resources share price higher:

This exemplary set of financial results marks the culmination of what has been a standout year of delivery, achievement and growth for our business.

Our strong cash position and debt-free balance sheet represents a fantastic springboard for Sandfire as we move ahead with the execution of our strategic growth plan, having significantly expanded the depth and capability of our organisation and senior leadership team during the year and embarked on the development of a major new copper mine at Motheo in Botswana.

What’s next for Sandfire in FY22?

Looking ahead, Sandfire noted that production is set to continue at full pace at DeGrussa through until the September 2022 quarter.

The guidance for FY22 is between 64,000 and 68,000 tonnes of copper and 30,000 to 34,000 ounces of gold.

C1 costs are expected to come in around US$1 to US$1.10 per pound.

In other developments which could affect the Sandfire Resources share price, a major focus will be on the new Motheo Copper Mine in Botswana. Construction has been rapidly ramping up following the grant of the mining license in July.

Sandfire is also progressing its near-mine exploration program at the Black Butte copper project in Montana. The Black Butte Feasibility Study is expected to continue being enhanced against the backdrop of improved copper prices.

Sandfire Resources share price snapshot

It has been a good year for Sandfire Resources on the ASX so far. Sandfire shares are up around 23% year to date. They are also up about 40% over the past 12 months.

Additionally, the Sandfire Resources share price is up about 7% over the past week.

The post Sandfire Resources (ASX:SFR) share price advances on record $170m net profit appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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