Ariana Resources hit by FX as first-half profits sink

Shares in Ariana Resources dropped on Friday after the AIM-listed gold miner reported a near-90% drop in first-half profits as it was hit hard by a big drop in the value of the Turkish lira.

Pre-tax profit totalled just £0.3m in the six months to 30 June, down from £2.9m a year earlier.

The Europe-focused company, with projects across Turkey and Cyprus, said operating costs were in line with the prior year, but a 38% decline in Turkish lira (at today's prices) led to "large foreign exchange charges and a corresponding reduction in other comprehensive income".

Meanwhile, Ariana's share of profits from the Kiziltepe Mine (in which it owns a 23.5% stake) reduced to just £0.7m, from £2.5m last year, as a result of higher admin and project costs.

Managing director Kerim Sener pointed out that the company conducted "significant operational activity" during the period, though revenues fell to £15.4m, from £22.8m the year before, while the cost of sales jumped to £12.4m from £9.2m.

The stock was down 6.5% at 2.5p by 1006 BST.