Miner’s financial status improves
The National, Thursday October 1st, 2015
NEWCREST’s financial status during the past year has been characterised by improvements in the company’s operational and financial performance, company chairman Peter Hay says.
Newcrest delivered a statutory profit of A$546 million (K1.062 billion), A$2.767 billion (K5.25 billion) higher than the previous financial year, which included asset impairments of A$2.3 billion (K4.47 billion).
Hay said in the company’s annual report that the performance was driven by the company’s focus on operational discipline and cash flow generation.
He said Newcrest’s business improvement programme called “Edge”, has been central to the company’s improved operating and financial performance.
Hay further highlighted that underlying profit of A$515 million (K1 billion) was A$83 million (K161 million) higher than the previous financial year, helped by increased revenues from the ramp-up of higher margin production at Cadia East, Australia, along with beneficial impacts from the weakening Australian dollar.
He said the focus on generating free cash flow was delivering results with A$1.08 billion (K2.10 billion) of free cash flow in the year, which was A$953 million (K1.85 billion) higher than the previous financial year.
“This has enabled us to reduce net debt by US$819 million (K1.59 billion) in the 2015 financial year.”
He said Newcrest’s financial objectives were to meet all financial obligations, maintain a strong balance sheet, so as to withstand cash flow volatility, be able to invest capital in value-creating opportunities, and be able to return excess cash generated to shareholders.
“As an unhedged gold producer, Newcrest looks to maintain a conservative level of balance sheet leverage.”
However, Hay noted that the board had determined that there would be no dividend for the 12 months ended 30 June this year as the company prioritise the repayment of debt.
“The board will consider returning to paying a dividend as debt is further reduced, taking market and operating conditions into consideration,” he said.