The West Australian © New ore conveyors are pictured above the ore crushing unit, center, at Newcrest Mining Ltd.'s Telfer Mine Thursday, July 28, 2005 after the official opening of mine in the Pilbara region of Western Australia. Newcrest Mining Ltd., Australia's largest gold mining company, was the biggest decliner in Sydney trading after cutting the full-year production forecast and raising cost estimates at its biggest mine. Photographer: Will Burgess/Bloomberg News
Gold miner Newcrest Mining's first half profit has dropped by 51 per cent on the back of weaker production and sales.
But the company expects a stronger performance in the second half of the 2012/13 financial year, as new projects begin production and existing assets improve their performance.
Newcrest made a net profit of $320 million in the six months to December 31, down from $659 million in the previous corresponding period.
Gold sales volumes were down 22 per cent on the same period in the previous year, and copper sales were seven per cent weaker.
Newcrest also said the strength of the Australian dollar, and currencies in Papua New Guinea and Indonesia were also increasing margin pressure on its operations.
The company operates the Cadia Valley mine in central west NSW, the Telfer mine in WA, two mines in PNG and single mines in Indonesia and the Ivory Coast.
The company said its first half performance was a reflection of the transition process Newcrest was currently undergoing.
It expects production and profits to rise in the second half of the financial year, as newly commissioned expansion projects begin operations.
Newcrest's Cadia East mine in NSW started commercial production on January 1, and its Lihir mine in PNG has also been improved.
"For the remainder of the 2013 financial year, Newcrest expects higher production in line with achieving the bottom end of guidance, and a subdued cost environment," the company said in a statement.
"Subject to metal prices and exchange rates, the company's margins and profitability should improve with the commercialisation of the company's two major projects, a more benign cost environment and other operational improvements."
Newcrest has forecast full year gold production in a range of 2.3 million to 2.5 million ounces.The company declared an unfranked interim dividend of 12 cents per share, in line with the previous year.
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