And the moon might really be made of green cheese.
" Globe says Barrick's profitable hedging days wane"
Barrick Gold Corp ABX
Shares issued 537,813,627 May 1 close $32.14
Thu 2 May 2002 In the News
The Globe and Mail reports in its Thursday, May 2, edition that Barrick
Gold saw its profit for the first quarter of 2002 fall almost 50 per cent
from the same period a year earlier as its ability to make money from its
hedge-trading activities diminishes. The Globe's Allan Robinson writes that
profit for the three months ended March 31 was $46-million or nine cents a
share, compared with a profit of $87-million or 16 cents a year earlier
(all figures U.S.). Last year's figure included a $52-million non-hedge
derivative gain. Barrick's revenue was $478-million, compared with
$499-million last year, as a result of lower production and prices on its
gold sales. The fair value of Barrick's hedge position has declined to a
loss of $127-million, down from a surplus of $356-million at the end of
2001, says Pollitt & Co. analyst Douglas Pollitt. "In the past, the company
booked gains from its hedge book into earnings," says Mr. Pollitt. "Now
they are losing money on the books." Barrick says that $483-million swing
in the off-balance-sheet item is mainly a result of the $23 rise in the
price of gold, and it represents 22 per cent of the gold reserves, which
are hedged.
(c) Copyright 2002 Canjex Publishing Ltd. stockwatch.com |
