Barrick’s Record Cash Haul Extends Investor Payout Streak
(Bloomberg) -- Skyrocketing bullion prices helped Barrick Gold Corp. generate record amounts of cash -- and shareholders are getting rewarded with another dividend hike.
The world’s second-largest gold producer spun out $1.3 billion of free cash flow in the third quarter, prompting the company to hike its quarterly payout for a third time in the past year. Barrick reported quarterly earnings and revenue that topped analysts’ estimates on Thursday, as surging bullion prices helped offset the impacts of the coronavirus pandemic on its business.
Gold surged to record heights above $2,000 an ounce in August, helping lift miners’ fortunes. Barrick raised its dividend almost 13% to 9 cents a share, joining rivals Newmont Corp., AngloGold Ashanti Ltd. and Agnico Eagle Mines Ltd. in boosting quarterly payouts. Barrick’s dividend has doubled since mid-2019.
Barrick still plans to announce a new policy of returning capital to shareholders next year, but it will be sustainable, Chief Executive Officer Mark Bristow said Thursday in a phone interview. “I’m more conservative than most, I’ve always been like that.”
The CEO said he will remain vigilant in keeping his eye on the company’s balance sheet given the state of the global economy and the “enormous” associated risks of the pandemic, including governments’ stimulus response.
“We are charting unprecedented waters at the moment, so my natural reaction is: stronger balance sheet than weaker,” Bristow said.
Barrick said Thursday it reduced its debt net of cash by 71% to $417 million in the quarter, and the company said it has no significant maturities until 2033. Bristow added in the interview the company will be “positive cash” next year.
Barrick rose 5.7% as of 10:01 a.m. in New York after earlier gaining the most intraday since Aug. 17. The shares have climbed 56% this year, closely tracking the gains of a Bloomberg Intelligence index of senior gold miners.
- Barrick reported adjusted earnings of 41 cents a share in the third quarter, beating the 33-cent average estimate of 18 analysts in a Bloomberg survey. Revenue jumped 32% to $3.54 billion, the highest since Barrick completed its merger with Randgold Resources Ltd. in January 2019.
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