Ashanti Q3 profits down, but says trend improving

LONDON, Oct 30 (Reuters) - African miner Ashanti Goldfields , being taken over by South African gold miner AngloGold, posted a fall in quarterly profits on Thursday but said output and costs were now heading in the right direction.

The Ghanaian firm posted a 20 percent fall in earnings per share before one-off gains to 15 U.S. cents for the three months to September 30 but profits rebounded strongly from the previous quarter due to higher gold output and prices and lower costs.

Ashanti became a takeover target after pulling itself from the brink of collapse in 1999, when a sharp rise in the gold price saddled the firm with huge losses on its hedge book.

Ashanti is London-listed but its shares trade more heavily in New York, where they closed at $11.27 on Wednesday, having climbed almost 60 percent since the bidding began for Ashanti in May. The company is forecast to generate earnings per share of 0.34 cents this year.

The $1.48 billion bid from AngloGold was cleared by Ghana's government on Wednesday. London-listed Randgold Resources Ltd (RRS.L: Quote, Profile, Research) had raised its all share offer to $1.7 billion last week, but Ashanti stuck with AngloGold.

Asked if there was any doubt the deal would be completed, finance chief Srinivasan Venkatakrishnan said: "I don't anticipate the deal falling into any difficulties."

Ashanti said gold output totalled 423,231 ounces in the three months to September 30, in line with a 2003 target of about 1.6 million ounces. Cash operating costs were $212 an ounce, higher than a year ago but below the second quarter.

The hedge book fell further into the red in the third quarter as gold prices and market interest rates rose. The book carried a loss of $329.8 million at end-September compared with a loss of $108 million at end-June. Ashanti booked exceptional gains of four cents per share in the quarter, mainly from an insurance payout on a damaged aircraft that is not being replaced