Newcrest Mining has forecast a continuing strength in the gold price after reporting a record high first half profit, driven by stronger gold, silver and copper sales.
Shares in Newcrest, Australia’s biggest gold miner, were up 57 cents, or 1.7 per cent, at $43.01 on Friday.
Newcrest booked a net profit for the six months to December 31 of $659 million, up 50 per cent from $438 million in the previous corresponding period, and which was above market expectations.
Morningstar analyst Mathew Hodge said Newcrest’s underlying net profit of $611 million, up 17 per cent on the prior corresponding period, was considerably better than Morningstar’s $411 million forecast.
“At face value, our full year financial 2012 net profit forecast will rise,” Mr Hodge said.
Chief executive Greg Robinson said he expected gold prices would remain buoyant within a range of $US1,500 to $US2,500 per ounce(oz).
“Currencies and economic conditions are vulnerable, so I think gold will play its role and prices will remain strong in the medium term,” Mr Robinson told a teleconference.
“It will remain volatile, but we think it will remain strong.”
Newcrest realised an average gold price during the first half of $US1,687/oz, up 31 per cent.
The company, which operates mines in four countries, maintained its full year gold production guidance of between 2.43 and 2.55 million oz, despite a five per cent dip in first half output to 1.09 million oz after lower grades at the Telfer mine in Western Australia.
Mr Robinson said the miner’s two major growth projects, the Cadia East underground mine in NSW and Lihir Million Ounce Plant Upgrade project in Papua New Guinea (PNG), were on time and on budget for completion this calendar year.
He said the company expected performance would improve at its Hidden Valley mine in PNG and Bonikro operation in Ivory Coast.
Newcrest was working on productivity improvements to counter higher energy, maintenance and labour costs, he said.
Mr Robinson also said the Australian-listed company expected to dual-list on the Toronto Stock Exchange as flagged last year, by the end of this month.
The listing was not for fund raising purposes but to improve Newcrest’s access to shareholders in US and Canadian markets, which were very positive markets for gold, he said.
“Our major competitors are there and we want a more accurate comparison from that market on our competitors to ourselves, and naturally we think we would compare pretty well.”
Newcrest declared an unfranked interim dividend of 12 cents a share, up from 10 cents for the same period the previous year, and Mr Robinson left the door open to a special dividend.
“If prices stay strong and the returns on the business are strong, and our gearing is in the boundaries that we’re very comfortable with … we will always contemplate what we can hand back,” he said.
Mr Robinson said he expected the dividends would be at least partly franked in 2012/13.
