Newcrest share price lifts despite profit falling 25%

The Newcrest Mining Ltd (ASX: NCM) share price is climbing today after the company announced its FY22 results.

The gold miner’s shares are currently up 4.02% to $19.42 apiece. For perspective, the  S&P/ASX 200 Index (ASX: XJO) is climbing 0.08% today.

Let’s take a look at what Newcrest reported to the market.

Newcrest reports

Highlights of Newcrest’s FY22 results include:

• Statutory and underlying profit fell 25% on FY21 to US$872 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) fell 16% to US$2.054 billion
• Gold production fell 7% to 1.956 million ounces
• Copper production dropped 15% to 120,650 tonnes
• Earnings per share (EPS) fell 27%
• Fully franked final dividend of US 20 cents per share compared to a 40 cents per share final dividend in FY21

What else did Newcrest report?

Newcrest’s underlying profit fell by $292 million compared to the prior corresponding period (pcp) due to lower production at the Cadia mine in NSW. This was due to a planned replacement and upgrade of the SAG mill motor in November 2021.

Production at the Lihir mine was also lower, due to maintenance, downtime and less autoclave availability.

Gold and copper sales fell due to lower production. Operating costs also suffered due to inflation pressure on oil, gas, steel and labour. Shipping costs were also higher.

The realised copper price leapt 19% on FY21 to US$4.36 a pound, partly offsetting these costs.

Realised gold price jumped by just one dollar to US$1,787 per ounce.

Despite this profit result, analyst consensus had been pointing to a lower underlying profit of US$845 million, the Australian Financial Review reported. Analyst Dan Morgan also labelled today’s results “positive versus market fears”, according to The Australian.

The Newcrest final dividend of 20 cents per share is half of that declared at the same time last year. However, it is higher than the final dividend declared in FY20.

Management commentary

Commenting on the results, CEO Sandeep Biswas said:

Newcrest has delivered a strong performance in FY22 with our operations producing just under two million ounces of gold at an All-In Sustaining Cost of $1,043 per ounce.

We were particularly pleased with our costs trending lower in the second half of the year, with Cadia achieving its lowest ever annual All-In Sustaining Cost of negative $124 per ounce.

Our balance sheet has also remained extremely robust with significant liquidity available to support our growth aspirations.

What’s ahead?

Newcrest is forecasting it will produce between 2.1 and 2.4 million ounces of gold in FY23, and 135 to 155,000 tonnes of copper.

The company is predicting a total all-in sustaining cost (AISC) of $2.1 to $2.4 billion.

Newcrest share price snapshot

The Newcrest share price has dropped around 24% over the past year, while it has lost around 20% year to date.

However, in the past month, Newcrest shares have leapt 4%.

For perspective, the ASX 200 index has lost nearly 6% in the past year.

The post Newcrest share price lifts despite profit falling 25% appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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