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Newcrest Fiscal Year Profit Falls by 25% — Update

By Rhiannon Hoyle

 

Newcrest Mining Ltd. recorded a 25% fall in annual profit, mainly because of lower production at a large gold mine in Australia's New South Wales state. The company also grappled with rising operating costs, as energy, labor and shipping expenses climbed.

Australia's largest listed gold miner said it made a net profit of $872 million in the year through June, down from $1.16 billion a year earlier.

Directors of the company declared a final dividend of 20 U.S. cents a share. The total payout for fiscal 2022, which included a 7.5-cent interim dividend, exceeded Newcrest's policy to pay a minimum annual dividend of 15 cents.

Newcrest recorded a 7% fall in gold output last fiscal year, and a 15% decline in copper output.

Production was lower at its Cadia gold mine in New South Wales following a planned mill upgrade. Volumes were also weaker at its Lihir operation in Papua New Guinea because of maintenance work.

The miner said it expects gold production in fiscal year 2023 to climb to between 2.1 million and 2.4 million troy ounces, from nearly 2.0 million ounces last year. It projected copper output of 135,000-155,000 metric tons, up from almost 121,000 tons.

Last fiscal year, "operating costs were impacted by the acute inflationary pressures experienced globally across a range of input costs such as oil and gas, steel and labor as well as higher shipping costs due to the global tightness and challenges in the sea freight market," said the company.

Still, a weakening Australian dollar provided some cost relief. The company has a large Australian operational footprint but reports its fiscal results in U.S. dollars.

Newcrest said it expects 6-8% of inflationary impacts on operating costs in fiscal year 2023.

"Continued pressure on capital costs is expected due to competition for labor from infrastructure projects together with the acute inflationary pressures experienced globally across a range of input costs such as energy and steel," the company said.

Newcrest said it didn't face material interruptions to production or supplies from Covid-19 last fiscal year, although some projects experienced disruptions. Efforts were made to minimize cost increases and delays, said the miner.

Earlier this month, Newcrest suspended underground mining at the Cadia operation due to problems in a ventilation shaft. The miner Friday said remediation work has been completed and the underground operation is back at full capacity.

 

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

 

(END) Dow Jones Newswires

August 18, 2022 19:49 ET (23:49 GMT)

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