Newcrest doubles first-half profit
Newcrest Mining deepened productivity improvements, increased production and enjoyed higher market prices.
Newcrest Mining’s first-half profit more-than doubled as Australia’s largest listed gold miner deepened productivity improvements, increased metal production and benefited from higher market prices.
Newcrest (NCM) today reported a net profit of $US187 million for the six months through December, up from $US81 million in the same period a year earlier.
The company said it will pay an interim dividend of 7.5 cents a share. A year ago, it hadn’t offered investors a midyear payout. The miner resumed dividend payments in August for the first time in three years, with chairman Peter Hay citing a strengthening financial position and outlook for the company.
Newcrest, one of the world’s top gold producers, has been working to improve the reliability of its mining operations, which have in recent years reported a patchy performance. A one-time darling of Australia’s share market, Newcrest faced setbacks of almost every sort: from problems with processing machinery to large writedowns and an investigation into the miner’s disclosure practices.
“Over the past two years, Newcrest has made solid strides to turn sentiment around,” UBS analyst James Brennan-Chong said in a January 30 note. “Operational consistency has improved and the balance sheet has strengthened.”
Shares in the gold miner rose almost 60 per cent in 2016 and are up another 11 per cent already this year.
Today, the company said it continues to reduce net debt, which totalled $US1.9 billion at the end of December, down from $US2.65 billion the same time a year earlier.
Last month Newcrest reported a 2 per cent on-year rise in half-year gold production, to 1.23 million troy ounces, and a 26 per cent jump in copper output, to 48,899 tonnes.
It said it was paid an average $US1277 an ounce for its gold, up from $US1113 an ounce in the same period a year earlier. The copper price it received edged up to $US2.30 a pound from $US2.29 previously.
Throughput at the company’s Lihir mill in Papua New Guinea — a key mine for Newcrest acquired as part of its $9.5 billion takeover of rival Lihir Gold in 2010 — hit a targeted annualised rate of 13 million tonnes for the first time during the period.
The company recorded a loss of $US10 million, however, on the sale of another Papua New Guinea gold operation during the period. Newcrest sold its 50 per cent stake in the Hidden Valley gold mine to partner Harmony Gold Mining — a deal that included Newcrest providing a one-off contribution of $US22.5 million toward future liabilities.
It also recorded a net investment hedge loss of $US62 million and a $US14-million writedown on exploration at its Bonikro operation in Ivory Coast.
Dow Jones Newswires
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout