By Akbar Mammadov
Azerbaijan’s mining company AzerGold CJSC has increased its net profit, gross profit and sales revenues in 2019, the company revealed in its financial report released on July 1.
The volume of AzerGold’s net profit increased by 55 per cent year-on-year in 2019, amounting to $12.4 million.
According to the report, the production of gold grew by 21.4 per cent in 2019 compared to that in 2018. In addition to gold, the production of silver also increased by 33.3 per cent in the same period.
The main reasons for the increase in gross profit, gross profit margin, net profit and EBITDA (operating profit before deducting interest, tax and depreciation costs) are the increase in production and sales, higher average price, and the increase in sales revenue cost is higher by 4.7 per cent more than the increase in sales.
Furthermore, the company's gross profit increased from $19.4 million in 2018 to $30.5 million in 2019, growing by $11.1 million (or 57 per cent).
In this regard, while the company ended the year 2018 with $32.3 million in EBITDA, in 2019, this figure increased by 36 per cent, amounting to $43.9 million.
The gross profit margin, calculated as the ratio of the gross profit (the difference between sales revenue and sales cost) to sales revenue, was 33 per cent in 2018, compared to 35 per cent in 2019.
Thus, while sales of AzerGold CJSC in 2018 amounted to 58.4 million US dollars, for 2019 this figure increased by 27.8 million US dollars (or 48 per cent), amounting to 86.2 million US dollars.
The main reason for the increase in sales revenue in 2019 is the higher sales of valuables (gold and silver) than in 2018, as well as higher average sales prices of valuables in world markets.
The company's cash and cash equivalents, growing by $12.4 million (or 264 per cent), increased from $4.7 million in 2018 to $17.1 million in 2019.
As a result, the company's total capital amounted to $9.2 million in 2018, whereas in 2019 this figure amounted to $27.6 million by increasing by $18.3 million (or 198 per cent).
Thus, the increase in total capital is based on the current year's net profit ($12.4 million), as well as an increase in the authorized capital by the state of $5.9 million (AZN10 million). Consequently, at the end of 2019, the company's share capital reached $7.2 million, while it was $1.3 million in 2018.
Moreover, one of the positive aspects is the significant reduction in the company's debt/capital ratio. With the receipt of profits and cash inflows, this figure fell to 10.13 per cent in 2018 and 2.63 per cent in 2019.
Thus, based on the financial statements that received a positive opinion as a result of financial audits conducted by an independent audit company “Baker Tilly Azerbaijan” CJSC, it was confirmed that the company ended last year with high income and profitability, further strengthening its position on all indicators.
“AzerGold” CJSC is a national mining company, which was established on 11 February 2016 according to the presidential decree.
Akbar Mammadov is AzerNews’ staff journalist, follow him on Twitter: @AkbarMammadov97
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