Newcrest has an annual net loss of A$5.78 billion

NEWCREST Mining Ltd has reported an annual net loss of A$5.78 billion (K11.9 billion) for the 12 months to June 30.

The company’s financial report released to the market yesterday said the A$5.78 billion (K11.9 billion) loss, resulted from a plunge in the gold price, lower production and massive write downs of A$6.23 billion (K12.9 billion).

It reported an underlying profit of A$451 million (K935 million), less than half of the A$1.08 billion (K2.2 billion) figure posted last year.

Lower-than-planned production at its Lihir and Gosowong projects in Papua New Guinea and Indonesia also affected the result.

The miner has not paid a final dividend, which it said was due to its reduced income.

All of Newcrest’s key performance metrics were lower and its underlying profit was below consensus analysts’ expectations for A$485 million (K1 billion).

Operating cashflow was down more than A$1 billion (K2 billion)   to A$707 million (K1.5 billion) and sales revenue was down 14.5% to $3.78 billion due partly to lower sales as well as the price.

Production was 8.0 % lower for the year at 2.11 million ounces with a 4% decline in the average realised gold price over the year to A$1,550 (K3,213) per ounce, which is historically very high.

The impairments and writedowns included more than A$3.5 billion (K7.25 billion) from the value of its Lihir project in PNG, for which it paid A$9.45 billion (K19.6 billion) in 2010.

Nearly A$1.3 billion (K2.7 billion) was written off its Telfer mine in Western Australia.

Net debt of A$4.14 billion (K8.59 billion) was up A$1.98 billion (K4.1 billion), has cash of A$958 million (K1.98 billion) and gearing of 29.1 %, which is not considered overly high.

Meanwhile, Newcrest had reconfirmed its strategy to focus on cash flow over growth.

As part of the measure, the miner closed its Brisbane office and cut around 250 jobs last June.

Newcrest owns mines in Australia, Papua New Guinea, Indonesia and Ivory Coast.

The National/One PNG