Newcrest share price lifts despite profit falling 25%

We take a look at the gold miner's results for financial year 2022.

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Key points

  • The Newcrest Mining share price is in the green today 
  • The company reported its FY22 results, with underlying profit falling by 25% on FY21 
  • Newcrest has cut its final dividend in half compared to FY21 

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:

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.

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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