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Newmont Goldcorp Q1 profit sags on transaction costs

The world’s largest gold producer Newmont Goldcorp has reported better-than-expected March-quarter headline earnings as higher output and lower costs helped offset lower metal prices.
Newmont Goldcorp Q1 profit sags on transaction costs Newmont Goldcorp Q1 profit sags on transaction costs Newmont Goldcorp Q1 profit sags on transaction costs Newmont Goldcorp Q1 profit sags on transaction costs Newmont Goldcorp Q1 profit sags on transaction costs

Newmont Goldcorp has reported better-than-expected March-quarter headline earnings

Denver, Colorado-based Newmont Goldcorp said adjusted income for the three months fell 5% year-on-year to US$176 million or 33c per share, which was higher than average analyst forecasts calling for earnings of 28c.

The company recorded 12c per share in adjustments related mainly to integration and transaction costs of the Newmont Goldcorp merger and the Nevada JV with Barrick Gold.

For this reason, net income for the period fell by a third year-on-year to $113 million or 21c per share.

Newmont reported consolidated cash flow from continuing operations of $574 million, more than double the prior-year quarter, and free cash flow of $349 million.

"This performance gave us the means to deliver superior shareholder value in the form of a special dividend, and to build a stronger future by advancing profitable projects on three continents, and by progressing two historic transactions," CEO Gary Goldberg said.

The company ended the quarter with net debt of $800 million and with $3.5 billion cash on hand, supporting an investment-grade credit profile.

The company said gold production rose nearly 2% to 1.23Moz in the quarter, but the average realised gold price fell by $26 to $1,300/oz compared to a year ago.

AISC for the three months fell to $907/oz from $943/lb a year earlier.

Newmont Goldcorp reported a 17% year-on-year decline in attributable copper production to 10,000 tonnes for the three-month period, mainly because of lower grades and throughput at Boddington, which were partially offset by higher grades at the Phoenix operation.

Newmont closed its $10 billion acquisition of former Canadian major Goldcorp last week, creating the world's biggest gold producer with assets in the Americas, Africa and Australia.

Attributable gold production for the new entity is expected to be 5.2Moz this year, which is mainly driven by a full year of higher-grade production from the recently completed Subika underground project in Ghana.

Production is expected to be 4.9Moz in 2020 and to average between 4.4-4.9Moz/y through 2023, excluding development projects which have yet to be approved.

Newmont Goldcorp closed 1.77% or 57c lower at $31.63 in New York on Thursday, which capitalises it at $16.85 billion.