Newcrest Mining Ltd., one of the world’s largest producers of gold by Australia’s largest by market value and production, thus further strengthening of the gold price helped lift its first half profit by 50%.
The higher price for the precious metal more than offset by the impact of a strong Australian dollar and inflation costs, and the Melbourne-based company said it would be interim dividend by 20% lift. Chief Executive Greg Robinson said the company would be a repetition of the special dividend is paid at the end of the last financial year, that 20 Australian cents per share consideration, if the price remains strong and Newcrest have excess capital.
Net profit rose to 659 million Australian dollars (U.S. $ 710.9 million) for the six months ended 31 December from A $ 438 million a year earlier, while sales for the period rose 19% to A $ 2.34 billion, the Melbourne-based company said. Profit was also boosted by a A $ 55 million gain on the sale of two Australian mines.
The company has eight mines in Australia, Indonesia, Papua New Guinea and West Africa.
Gold sales volumes were only 1% higher at 1.22 million troy ounces, but the average gold price for the half year was up 31% on-year to U.S. $ 1687 per ounce. In Australian dollar terms, Newcrest, the average price realized was still 20% higher, although the average copper price in local currency was 2% weaker.
Mr. Robinson said earlier this month that the price of the precious metal will likely remain strong for the coming years, trading in a wide range of U.S. $ 1,500 to $ 2,500 per ounce. Gold is generally seen as a safe haven investment in times of economic uncertainty, benefiting from investors seeking a hedge against currency risk, inflation and volatility in other asset classes such as equities.
Cost pressures continue to increase at Newcrest and his colleagues, and the company said the cost of sales increased 22% for the six months to A $ 1.36 billion due to increases in items such as employee salaries, fuel and mining contracts .
The results are generally well received by analysts.
“We believe that the production will improve in the coming quarters and expansion of projects closer to completion, the momentum in the share is to the upside,” analysts at Macquarie said in a research note to clients.
The company declared an interim dividend of 12 Australian cents a share, up 10 cents a year earlier.
source:onlinewsj
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