Newcrest Mining Ltd., Australia’s biggest gold producer, posted an 11% decline in full-year earnings as it prepares to be acquired by sector leader Newmont Corp. in the industry’s largest ever takeover.
(Bloomberg) — Newcrest Mining Ltd., Australia’s biggest gold producer, posted an 11% decline in full-year earnings as it prepares to be acquired by sector leader Newmont Corp. in the industry’s largest ever takeover.
Underlying profit fell to $778 million in the year to June 30 on higher costs, weaker copper prices and the impact of higher interest rates, the company said Friday. The result beat an average analyst estimate of $702 million, according to forecasts compiled by Bloomberg.
The producer will pay a final dividend of 20 cents a share, bringing the total for the fiscal year to 55 cents. “This is equal to the highest total annual dividend Newcrest has ever determined,” Interim Chief Executive Officer Sherry Duhe said in a statement.
Newcrest earlier this year agreed to a $19 billion takeover offer which will see Newmont consolidate its position as the world’s biggest bullion producer with mines across the Americas, Africa, Australia and Papua New Guinea. The firms are continuing to target implementation of the deal by November, the Melbourne-based producer said.
Read more: Newcrest Leftovers Don’t Appeal to Australia’s Top Gold Miners
“The combined company will set a new benchmark in gold production,” Duhe said. The new producer will have “increased diversification across a premier portfolio of gold and copper assets, as well as additional flexibility in project sequencing and growth optionality,” she said.
Newcrest does not expect any hurdles as it moves toward final regulatory approvals, Duhe said on a call with analysts. Until then and completion, the company will run independently and continue to focus on its ongoing feasibility study at its Red Chris site in Canada, Duhe added.
“We will continue to work at pace,” she said, adding that the exact timing for the study’s conclusion was yet to be determined. “We’ve given the range around the end of the calendar year.”
Newcrest declined 0.2% to A$25.91 ($16.92) in Sydney trading Friday, as of 10:59 a.m. local time.
The miner’s gold output jumped 8% to 2.1 million ounces in the fiscal year as copper production rose 10%. All-in sustaining costs, a measure that includes spending on production, administration, capital and exploration, increased 5%.
The company sees its gold and copper output staying relatively flat in fiscal 2024, with guidance for 2 to 2.3 million ounces, and 120,000 to 140,000 tons, respectively.
(Updates with comments from Duhe, shares from paragraph 6)
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