What happened?
The fabled City of Gold has not been so golden recently. Eldorado Gold (EGO +2.26%), beset by struggles in a key market, turned in a Q4 2015 and fiscal 2015 that were both deep in the red. For the quarter, the company's revenues amounted to $199 million, with a bottom-line loss of $1.2 billion ($1.73 per share). The deficit was much narrower on an adjusted basis, coming in at just over $19 million ($0.03).
IMAGE SOURCE: PIXABAY.
On average, analysts had been expecting a top line of $195 million and breakeven for the adjusted net result.
For the full year, revenue came in at $863 million, with an adjusted net profit of $13 million ($0.02). Those figures were significantly below the 2014 numbers, which were $1.1 billion on the top line and $139 million ($0.19) for net profit.
Does it matter?
Both the quarterly and the annual results were fairly ugly. They weren't, however, surprising. Firstly, they weren't too far off Eldorado Gold's preliminary results announcement from January.
Second, both the quarter and the full year were times of declining gold prices, a factor that has hit the precious metals industry as a whole. Specific to Eldorado Gold were the company's operations in Greece, which were at a standstill due to the government's resistance to the development of the Skouries mine. A key reason for the bottom-line losses was the impairment charges of $1.5 billion booked largely because of these difficulties.
What a difference a few weeks make, then. The gold price -- and sentiment about the miners that dig up the metal -- has shown a marked improvement of late. Meanwhile, in late February, Eldorado Gold announced it had been granted a building permit for its processing plant at Skouries. Although the mine project as a whole "remains on care and maintenance as the Company awaits the timely issuance of pending routine permits and licenses," this development is a positive sign that Skouries is moving forward at last.
Much will depend on how this unfolds in the coming months. In that light, the latest set of results -- uninspiring as they are -- shouldn't have much of an impact on the investing thesis for the stock.
