MELBOURNE: Lihir Gold Ltd has beaten expectations with a big jump in its underlying profit on the back of record prices and production.
Australia’s second largest gold miner reported a net loss for the year of US$234 million (K641 million), after writing off its troubled Ballarat mine.
The miner revealed its output exceeded one million ounces for the first time, and it achieved a record underlying profit of US$289.5 million (K793.15 million), up 57% from US$184 million (K504.10 million) in 2008.
The company’s acting chief Phil Baker told a teleconference that while energy costs had increased during the year and the Australian dollar had strengthened, record gold prices helped buoy the results.
‘Higher margins, coupled with the higher volumes that we are producing and selling these days, are what is adding to very massively increased cashflow from operations and the underlying profitability of the group,” Mr Baker said.
While refusing to speculate on where gold prices could head, he said the average price last year was US$956/oz but more recently it had been above US$1,100 (K3013.79)/oz.
IG Markets analyst Ben Potter said the company’s results easily beat analysts’ expectations, which were for underlying earnings to be US$268 million (K734.25 million).
“It was quite a significant increase there,” Mr Potter said.
The company declared a final dividend of UUS$0.015 per share.
Revenue was US$1.0874 billion (K2.98 billion), up 45% on the prior year, and mine earnings before interest, tax, depreciation and amortisation were 63% higher at US$634 million (K1.736 billion).
Lihir said it mined 1.12 million ounces of gold last year, a record for the company. – AAP