President and Chief Executive Officer of Goldcorp., Chuck Jeannes, delivers a speech at the annual general meeting held at the Pan Pacific Convention centre in Vancouver, May 18, 2011.Ben Nelms/Reuters
Goldcorp Inc. slashed its dividend as the gold producer moved to buttress its balance sheet after reporting a $4.3-billion (U.S.) loss for the fourth quarter, largely as a result of a massive writedown.
The Vancouver-based miner said it will reduce its annual dividend to 8 cents per share from the previous 24 cents a share. The change is effective April 1 and future dividends will be paid quarterly instead of monthly.
Goldcorp shares have surged 37 per cent this year as a rally in the price of gold has boosted nearly all producers of the precious metal. However, large writedowns have also been a regular feature of this earnings season.
In Toronto, Goldcorp's shares were down more than 13 per cent at $18.71 around 4 p.m. on Friday.
Goldcorp was no exception, taking an impairment charge of $4.9-billion related to foreign exchange and reduced expectations for the long-term price of gold. Its loss for the quarter of $5.14 a share was far below analysts' expectations for a 1 cent a share profit.
"Goldcorp achieved 2015 production and all-in sustaining cost guidance while bringing two large new gold mines into production," Chuck Jeannes, the company's outgoing president and chief executive, said in a news release.
"While we are encouraged by the recent upturn in gold prices, the impairments taken reflect the valuation of our assets at conservative assumed lower metals prices over a longer time horizon," he added. "The backbone of our portfolio remains well-positioned for future success."
Goldcorp's revenue climbed to $1.07-billion in the quarter, well above the $835-million it took in during the same period a year earlier. Its results were boosted by output from two mines, Eleonore in northern Quebec and Cerro Negro in Argentina, that began commercial production in 2015. Both new mines faced challenges during their first year of production – Cerro Negro from work stoppages and Eleonore as a result of an unexpected degree of rock folding.
Despite those challenges, the company produced 909,400 ounces of gold in the fourth quarter, slightly above analysts' expectations for 900,500 ounces. Its all-in sustaining costs were $977 an ounce, down from $1,035 a year earlier.
Mr. Jeannes is stepping down as chief executive on Feb. 29. His successor is David Garofalo, the former president of HudBay Minerals. He "is the right person to lead Goldcorp through this next phase" of harvesting cash from past investments and growing future cash flow from low-capital intensity projects, Mr. Jeannes said.
Goldcorp is holding a conference call to discuss the results at 1 p.m. Toronto time Friday.