Newcrest Forecasts Higher Gold Output After FY17 Profit Slips

By Robb M. StewartFeaturesDow Jones Newswires

MELBOURNE, Australia--Newcrest Mining Ltd. (NCM.AU) pledged to at least hold its annual dividend payout steady and forecast a rise in gold output after full-year profit declined in a year when its flagship mine in Australia was disrupted by an earthquake.

Net profit fell 7.2% to US$308 million in the year through June from US$332 million the year before.

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Earnings were held back by one-time items, including a US$10 million loss taken earlier in the year on the sale of Newcrest's 50% interest in the Hidden Valley mining project in Papua New Guinea to South African partner Harmony Gold Mining Co. (HAR.JO).

Still, sales revenue for the period was 5.5% stronger at US$3.48 billion against US$3.3 billion the prior year.

The Melbourne-based miner plans to pay a final dividend of 7.5 cents a share, steady on last year, bringing the full-year dividend to 15 cents. The company said a new dividend policy would target a payout of at least 10%-30% of annual cash flow, with the dividend being no less than 15 cents over a full year.

Net debt was reduced by 27% over the year to US$2.1 billion.

Production by Newcrest, one of the world's largest producers of gold, slipped by 2.4% over the year to 2.38 million troy ounces, the lower end of the company's target after an April quake disrupted output at the Cadia mine in eastern Australia and offset record output at the Lihir mine in Papua New Guinea. Production at one part of Cadia resumed in July and the company has targeted a restart at a second area this quarter.

For the new year, Newcrest said it expected production of gold would rise to between 2.4 million and 2.7 million ounces, although output in the current quarter is set to fall quarter-over-quarter due to the higher level of shutdown activity. Gold production and cash flows are expected to be higher for the second half of the financial year as Cadia ore output ramps up and there are fewer planned shutdowns, it said.

Copper output is forecast to be 80,000-90,000 metric tons for the financial year.

Write to Robb M. Stewart at

(END) Dow Jones Newswires

August 13, 2017 19:42 ET (23:42 GMT)