Newcrest delivers dividend despite hefty profit tumble

The gold and copper miner has delivered its first dividend in 3 years, as it reports a sharp fall in underlying profit.

Newcrest CEO Sandeep Biswas said the miner’s numbers were robust. (Stuart McEvoy)

Newcrest has delivered its first dividend to investors in three years despite reporting a 12 per cent slide in net profit to $US332 million ($433.9m).

The gold and copper miner said revenue slid 9 per cent to $US3.3 billion on weaker commodity prices as underlying profit, which strips out the impact of one-off items, tumbled 24 per cent to $US323m.

The numbers were marginally below analyst forecasts.

It declared an unfranked dividend of US7.5c a share after flagging a payout for the first time in three years upon the release of production results last month.

Newcrest (NCM) chief executive Sandeep Biswas said the miner’s numbers were robust given a series of challenges including the suspension of operations at Gosowong in Indonesia and lower realised prices for the year, with the dividend back in play due to significant debt reduction moves.

“Newcrest’s financial performance in the 2016 financial year was solid, with all sites contributing positive free cash flow and the group achieving a 27 per cent reduction in net debt,” he said.

“The resulting improvement in Newcrest’s target financial metrics, together with Newcrest’s profitability and market conditions, has given the board confidence to announce a final unfranked dividend.”

The group detailed production guidance for fiscal 2017 for the first time, tipping gold output in a range of 2.4 to 2.65 million ounces, a very similar range to last year’s guidance despite warning of challenges through the first quarter as planned shutdowns were seen at Telfer and Lihir.

Through the year to June 30, 2016, Newcrest produced 2.44 million ounces of gold, at the lower end of its forecast.

Its copper production guidance for FY2017 is exactly in line with last year’s prediction of 80,000 to 90,000 tonnes. The group ended up delivering 83,070 tonnes.

“Newcrest continues to focus on safety, operational discipline and cash flow generation, and has identified a range of opportunities to improve its performance in FY17 and pursue profitable growth,” Mr Biswas said.

The miner added it expected total capital expenditure for the coming year to fall in a range of $US550-$US650m.