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Newcrest pays dividend despite profit slip

AAP logoAAP 14/08/2016 Prashant Mehra

Newcrest Mining will pay a dividend for the first time in three and a half years despite a 12 per cent drop in full-year profit.

Australia's largest gold miner reported net profit of $US332 million ($A434 million) for the year to June 30.

After stripping out one-off items, the decline in underlying profit was even greater, slipping 24 per cent to $US323 million under lower gold and copper prices and shutdowns at some of its mines.

Managing Director Sandeep Biswas described the performance as solid, saying all sites contributed positive cashflow and that the company continued to lower costs and repay debt.

"The resulting improvement in target financial metrics, together with Newcrest's profitability and market conditions, has given the board confidence to announce a final dividend," Mr Biswas said.

Newcrest will pay an unfranked dividend of 7.5 cents a share, its first payout since February 2013, which was followed by a record annual loss amid falling gold prices.

Gold prices have recovered somewhat this year, but had been weak through the second half of 2015.

Newcrest said its average realised gold price in FY16 slipped five per cent from the previous year, resulting in a three per cent decline in gold revenue to $US2.86 billion.

The miner scraped through to its full year production guidance, despite struggling with disruptions at various operations.

Gold and copper output was affected in the June quarter because of production being suspended at its two underground Indonesian mines in February, following a geotechnical incident.

Gold production had also been hit in the previous two quarters due to a five-week shutdown of a mill at its Cadia gold and copper mine in NSW, and fatalities at Cadia and at Hidden Valley in Papua New Guinea.

For FY17, Newcrest is forecasting gold production in the range of 2.4-2.65 million ounces, and copper production in range of 80,000 and 90,000 tonnes, largely unchanged from the previous year.

The company also outlined capital expenditure between $US550 million to $US650 million for the new financial year, the bulk of which will be spent on ramping up processing capacity in Cadia and on building a seepage barrier at the Lihir mine in Western Australia.

Newcrest said gold production in the ongoing September quarter is expected to be relatively lower than the full year average because of planned shutdowns at the Lihir and Telfer mines.

At 1400 AEST, Newcrest Mining shares were down 91 cents, or 3.5 per cent, at $24.63 each.

NEWCREST FY16 PROFIT SLIPS

* Net profit down 12 pct to $US332m

* Revenue down 9 pct to $US3.29b

* Final dividend of 7.5 US cents, unfranked

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