|Newcrest bullish despite slump|
|THE WEST AUSTRALIAN|
|Friday, 08 February 2013 13:36|
Shares in Newcrest Mining rose sharply after the gold miner shrugged off a 51 per cent slump in first half profit and pointed to an improved second half.
The company announced this morning its first half profit had slumped 51 per cent but it expected a stronger performance in the second half as new projects came into production and existing assets improved their performance.
Newcrest made a net profit of $320 million in the six months to December 31, down from $659 million in the previous corresponding period.
Gold sales volumes were down 22 per cent on the same period in the previous year, and copper sales were seven per cent weaker.
Newcrest also said the strength of the Australian dollar, and currencies in Papua New Guinea and Indonesia were also increasing margin pressure on its operations.
The company operates the Cadia Valley mine in central west NSW, the Telfer mine in WA, two mines in PNG and single mines in Indonesia and the Ivory Coast.
The company said its first half performance was a reflection of the transition process Newcrest was currently undergoing.
It expects production and profits to rise in the second half of the financial year, as newly commissioned expansion projects begin operations.
Newcrest's Cadia East mine in NSW started commercial production on January 1, and its Lihir mine in PNG has also been improved.
"For the remainder of the 2013 financial year, Newcrest expects higher production in line with achieving the bottom end of guidance, and a subdued cost environment," the company said in a statement.
"Subject to metal prices and exchange rates, the company's margins and profitability should improve with the commercialisation of the company's two major projects, a more benign cost environment and other operational improvements."
Newcrest has forecast full year gold production in a range of 2.3 million to 2.5 million ounces.
The company declared an unfranked interim dividend of 12 cents per share, in line with the previous year.
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