Barrick Gold (ABX) released disappointing second quarter results. The company's shares fell amid a loss in the second quarter. The main reason for this decline was a weaker gold price and lower gold and copper sales volume. The company is worried about its weak performance. It is taking measures to improve its profitability. Barrick Gold has also cut its cost forecast for the future due to a decline in the gold prices.
It is focusing on cutting costs and selling assets. However, the situation is bad for the gold miner. Let us have a look if Barrick Gold's newly appointed management has anything new and innovative in their pockets which can improve its performance.
How is Barrick Gold doing?
Barrick Gold's quarterly revenue fell 24% to $2.43 billion. This could not meet the analyst's estimates and fell slightly short of the $2.47 billion. The loss that the company posted also included an impairment charge of $514 million related to its Jabal Sayid project. On the earnings front, Barrick Gold earned $0.14 per share. It also failed to meet analyst's estimates who were modeling the EPS to be $0.16.
The situation is not so good in the mining industry. So, it is not so astonishing to see the poor performance by Barrick Gold, but the thing that frightens is the falling revenue. Other peers such as Yamana Gold are posting good improvement in the revenue despite a weak market. Barrick Gold has to focus on initiatives that will lead it to profitability.
Due to poor commodity prices the mining companies are under pressure to cut costs and sell assets. Barrick has also made moves to reduce costs and improve capital efficiency. It has helped the gold miner to lower its mid year operating and capital cost guidance which can help it to improve its market share in future.
Looking to turnaround
Barrick Gold is targeting to achieve $500 million annual savings which it announced earlier this year. It is confident that its cost cutting initiatives are working and it believes to achieve this target by the end of the year. Moreover, Barrick Gold is cutting excessive cost where it thinks it can be cut. It has made a good 30% reduction in the working capital. In addition, it has also launched global programs which are focused on reducing inventory and improving maintenance planning.
Barrick Gold has great expectations with its corner stone mines. In the past, it five most important c
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