Why Northern Star Resources Ltd just reported a profit slide

Shares in gold production and exploration company Northern Star Resources Ltd (ASX: NST) slid 0.9% to $6.04 today to coincide with its half-year results announcement which included a profit drop of 7%.

Share prices for Northern Star, whose flagship project is the Paulsens Gold Mine, have been tracking upwards steadily since this time last year, when they sat around $4.48, but today’s results did not give investors the news they wanted.

Northern Star’s NPAT was down 7% from the previous corresponding period to $79.1 million, with the company citing the wind down of Paulsens mine for blame. Operations at its Millenium mine are expected to boost NPAT for the second half.

Revenue was up 14% to $435.3 million, with cash flow from operating activities also up 14% to $126.8 million.

Northern Star is reported to be on track to meet FY18 guidance with plans to “capitalise on significant growth opportunities”.

Shareholders will see a 50% increase in interim dividend to 4.5c per share fully franked.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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