Newcrest (ASX:NCM) share price lifts following annual report release

Newcrest shares are delivering a solid performance on Tuesday.

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St Barbara share price Minder underground looks excited a he holds a nugget of gold he has discovered.

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The Newcrest Mining Ltd (ASX: NCM) share price is edging higher in afternoon trade and is now changing hands at $23.19 apiece.

There have been no price-sensitive updates out of Newcrest’s camp that might directly explain the gains today. However, the price of gold edged higher overnight and other ASX gold shares are also enjoying some time in the green today.

Furthermore, Newcrest released its FY21 annual report prior to market open this morning.

Let’s take a look at some of the highlights.

Record free cash flow for Newcrest Mining in FY21

As reported in the company’s earnings results in August, Newcrest highlighted a record US$1.1 billion in free cash flow conversion for FY21, up from $804 million in 2019 (as 2020 resulted in a loss from merger & acquisition (M&A) activity).

This brings the cumulative free cash flow generated from FY15 to FY21 to $4.295 billion and consequently allowed for management to approve a US55 cents per share dividend in FY21.

Newcrest also recognised a statutory profit of $1.16 billion, up from $647 million a year ago, whereas it recorded a return on capital employed (ROCE) of 18.5% in FY21, up from 13.8% the year prior.

It achieved this result by mining and producing 21 million ounces of gold for the year, on an all in sustaining cost (AISC) of US$911 per ounce.

Outside of this, Newcrest established its “Forging an even stronger Newcrest plan” that encompasses 5 key areas for development for the company.

These include safety, sustainability, people, operating performance, technology and innovation, as well as profitable growth.

It hopes to achieve the goals set out in its new framework by the end of calendar year 2025, per the release.

Newcrest has also set a target of achieving net-zero carbon emissions by the year 2050 and released its first modern slavery statement in December 2020.

On its path to net zero, the company has a 30% reduction target by 2030 and has set up a number of different model scenarios in accordance with the Taskforce on Climate-Related Financial Disclosures.

Investors certainly haven’t been pushed away from the release of Newcrest’s annual report, and have pushed the Newcrest Mining share price 1% higher on the day.

Newcrest Mining share price snapshot

The Newcrest Mining share price has had a difficult time when zooming out and taking a longer-term view. It’s down 10% this year to date, after falling a further 25% in the past 12 months.

Both of these results are well behind the S&P/ASX 200 index (ASX: XJO)’s gain of around 25% in the last year.

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The author Zach Bristow has no positions 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 Bruce Jackson.

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