Second half will be better, says Newcrest boss Sandeep Biswas, as gold miner’s profit tumbles
Newcrest Mining will pay a $US7.5c a share interim dividend after declaring a $US298m net profit for the first half of the financial year, substantially down on the previous year.
Newcrest Mining will pay a $US7.5c a share interim dividend after declaring a $US298m net profit for the first half of the financial year, substantially down on the previous year following major maintenance campaigns at key mines.
Newcrest’s mines produced 832,298 ounces of gold in the half – down from just over 1 million ounces in the first half of the previous financial year – along with 50,900 tonnes of copper, at an average all-in-sustaining cost of $US1194 an ounce. Its $US298m half-year net profit was down 46 per cent.
The company said the planned replacement and upgrade of the mill at its flagship Cadia mine in NSW was the biggest factor in the fall in output and profits, along with ongoing issues at Lihir in Papua New Guinea.
Newcrest managing director Sandeep Biswas said it was a key period for the miner, however, as the company set up its portfolio pipeline for growth in the future.
“We have taken a big step forward in our profitable growth agenda during the first half of (the financial year),” he said. “We are projecting a material growth in our operating margin and cashflow over the next decade.”
Mr Biswas said he expected the second half of Newcrest’s financial year to be far stronger, with the company maintaining its 1.8 to 2 million ounce output guidance for the full financial year.
Newcrest booked revenue of $US1.3bn for the half-year, down 27 per cent from the previous corresponding period. It had earnings before interest, tax, depreciation and amortisation of $US740m, down 35 per cent.
But while output at Cadia is expected to return to far higher levels in the second half of the year, the company has struck troubles at its Havieron near-term growth prospect in the Pilbara.
Mr Biswas told reporters workers had struck a difficult area of ground in the underground decline they were building, potentially delaying work on the project.
“We’ll redesign a little bit of the decline to try and get into better ground quicker. But that has been causing delays, no question, and there will be further delays in that piece of it,” he said.
“What the impact on the overall schedule is we don’t know yet, but we still expect to be having ore out of Havieron in FY24.”
And, despite some recent progress on negotiating a deal with the Papua New Guinea government that would allow Newcrest to get on with the job of building the long-stalled Wafi-Golpu copper and gold mine, Mr Biswas said he did not expect to reach a deal with the PNG government over the grant of a special mining licence ahead of this year’s elections in the country. “In the last few weeks, we’ve seen a renewed intensity of discussion through the state negotiating team,” he said.
Newcrest shares closed up 35c to $23.85 on Thursday.
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