Newcrest Mining Limited (ASX:NCM) shares lower despite a profit boost on the back of higher gold prices

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The Newcrest Mining Limited (ASX: NCM) share price has fallen, down 52 cents or 2.55% to $20.02 on Thursday afternoon.

In results released after the close of ASX trading on Wednesday, Newcrest reported a 34% fall in full-year statutory profit to $US202 million ($275 million) for the year to June 30 as a result of $US257 million in significant items.

Sales revenue rose 2% to $3.56 billion and the company declared a final dividend of 11 US cents, fully franked.

Newcrest’s underlying profit was up 16% or $US65 million to $459 million thanks to higher gold and copper prices and earnings before interest, tax, depreciation and amortisation were 11% higher at $1.57 billion.

The group’s gold production for the year was down 1% to 2.346 million ounces at a realised price of $US1,308 per ounce, up 4% on the previous year.

Copper production slipped 7% to 77,975 tonnes and claimed a realised price of $US3.09 per pound, up 27%.

Newcrest’s statutory result was hit by $US257 million in significant items, including a $US188 million asset impairment at its Telfer gold mine in Western Australia.

The Telfer impairment results from lower ore and higher waste levels than anticipated.

Newcrest also wrote down plant and equipment at its Namosi mine in Fiji and Bonikro mine in Cote d’Ivoire, which was sold in December.

Full-year results were also impacted by an April 2017 earthquake that affected first-half production at the Cadia gold mine in NSW.

Outlook

Newcrest provided FY19 production guidance of between 2.35 and 2.6 million ounces of gold, exceeding its record production achieved in FY18.

Since the beginning of 2018, the Newcrest Mining Limited share price has fallen 12.45%, compared to a gain of 3.05% for the S&P/ASX 200 Index.

with AAP

Contributors to this article may own shares in some of the companies mentioned in this article. The Capital Club has a thorough disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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Lauren Surplice is a keen follower of the stock market, investing in individual companies and funds. She follows the daily stock market news, covering the ASX stocks that are moving the markets. You can contact Lauren at laurens@thecapitalclub.com.au