Hot Stock under Consideration: Eldorado Gold Corporation (NYSE: EGO)

On Tuesday, Shares of Eldorado Gold Corporation (NYSE: EGO) declined -0.28% to $3.50. The stock traded total volume of 1,577,322 shares lower than the average volume of 1.73M shares.

Eldorado Gold Corporation, (ELD.TO)(EGO) recently reports the Company’s financial and operational results for the fourth quarter and year ended December 31, 2018.

REVIEW OF FINANCIAL PERFORMANCE:

Total revenue of $459.00M, represented a 17% increase over 2017 revenue of $391.40M because of increased gold production. The realized gold price in 2018 was $1,269 per ounce, marginally higher than the realized gold price of $1,262 per ounce in 2017.

Exploration and evaluation expenditures reduced from $38.30M in 2017 to $33.80M in 2018. The decrease for both the year and fourth quarter reflected the exploration focus on brownfields resource expansion at the Company’s mining operations and development projects during 2018. General and administrative expenses of $46.80M in 2018 reduced 14% from $54.60M in 2017.

Deferred tax recovery was $86.50M for 2018 because of the impairment adjustments recorded for Kisladag and Olympias, together with a 1% decrease in the Greece corporate income tax rate. The corporate income tax rate in Greece was 29% in 2018 and will gradually decrease 1% each year to 25% by 2022.

Net Loss to Shareholders:

In 2018 the net loss to shareholders from continuing operations was $361.90M, ($2.28 per share) contrast to net loss from continuing operations of $7.10M and a net loss from discontinuing operations of $2.80M in 2017, reflective of the impairment charge of $330.20M ($247.70M net of deferred tax) at Olympias in Q4 2018, and the impairment charge related to Kisladag leach pad assets of $117.60M ($94.10M net of tax) in Q3 2018.

In Q4 2018, the Company recorded an impairment adjustment for Olympias of $330.20M ($247.70M net of deferred tax). The Company believes this is reflective of the continued jurisdictional risk with obtaining permits in Greece, and the recent softening of the global concentrate market. As a result, the net loss attributable to shareholders during the quarter was $218.20M ($1.38 per share) as contrast to a net loss attributable to shareholders for the quarter ended December 31, 2017 of $20.70M ($0.15 per share)

In 2018, the adjusted net loss from continuing operations was $28.60M, contrast to adjusted net earnings of $15.20M in 2017, a reflection of higher production and gold price in Q4 2017.

The adjusted net loss from continuing operations in Q4 2018 was $18.90M as contrast to Q4 2017 adjusted net loss of $0.40M. Adjusted net earnings for Q4 2018 were slightly lower year over year because of reduced sales volumes, and marginally lower gold prices, together with increased production costs because of first year of Olympias production.

EGO has the market capitalization of $530.78M and its EPS growth ratio for the past five years was 13.00%. The return on assets ratio of the Company was -7.30% while its return on investment ratio stands at -10.00%. Price to sales ratio was 1.16 while 75.80% of the stock was owned by institutional investors.

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