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Newcrest fiscal H1'18 profit slumps amid production disruptions

Newcrest Mining Ltd. said Feb. 15 that its net profit dropped 48% year over year to US$98 million for the first half of its fiscal 2018.

The company said the drop in net earnings in the six months ended Dec. 31, 2017, was due to a noncash writedown totaling US$18 million as a result of the sale of its 89.89% stake in the Bonikro gold project in Ivory Coast in December 2017 and an adverse verdict in the Indonesian Tax Court over a fiscal 2013 tax rate dispute.

EBITDA fell to US$624 million, from US$783 million booked a year earlier, with free cash flow tumbling to US$134 million from US$258 million amid lower copper and gold sales in the wake of a seismic event at the Cadia project, higher depreciation expenses and higher costs from a stronger Australian dollar.

The company's gold production declined 8% from the year-ago figure to 1.14 million ounces, while all-in sustaining costs increased 12% year over year to US$860 per ounce due to lower Cadia output, higher stripping costs at Lihir and Telfer and the stronger Australian dollar.

In the December 2017 quarter, Newcrest produced 612,695 ounces of gold, up 17.2% from the prior quarter.

The company board declared a fully franked interim dividend of 7.5 U.S. cents per share.