Newcrest Mining (ASX: NCM) shares end lower following 1HFY23 results, update on takeover offer - Kalkine Media

February 16, 2023 06:40 PM AEDT | By Neha Simpy
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Highlights:

  • Newcrest Mining Ltd (ASX: NCM) announced its 1H2023 results on 16 February 2023.
  • During 1H2023, the company’s revenue came in at US$2,121, increasing 24% from pcp.
  • The company’s Board has collectively refused Newmont’s indicative proposal as it does not represent adequate value for stakeholders.

ASX-listed gold miner Newcrest Mining Ltd (ASX: NCM) shares ended lower on Thursday, 16 February 2023, following the announcement of its 1H2023 results ended 31 December 2022, and an update on the takeover offer it received from US gold mining giant Newmont Corporation earlier this month. Shares of Australian gold miner ended 1.69% lower at AU$23.90 on Thursday, underperforming the broader ASX200 index, which closed with 0.79% gains.

Company Name Market Price
(AU$)
Market Cap
(AU$)
Yearly Return
(%)
Dividend Yield
(%)
PE Ratio
(x)
YTD
(%)
52W High
(%)
52W Low
(%)
NEWCREST FPO [NCM] 23.9 21.36B 2.83 1.63 16.42 17.78 28.96 15.72

*Data powered by Morningstar®. Data delayed 20 minutes unless otherwise indicated. Read More
as of 16/02/2023, 06:40:38 PM AEDT

During 1H2023, the company’s revenue came in at US$2,121 million, increasing 24% from US$1,715 million in 1H2022. Statutory Profit fell 2% to US$293 million versus US$298 million last year on account of lower realised value of gold and copper and higher costs, the company said.

The company’s gold prepay credit facility was paid back initially with US$173 million obtained from Lundin Gold in January this year, along with the inaugural Lundin Gold dividend of US$15 million payment made in September last year.

Newcrest’s balance sheet continues to be comfortable under all financial policy objectives, with net debt of US$1.7 billion, representing a leverage ratio of 0.8 times and a gearing ratio of 13%. The company has substantial liquidity with US$2 billion in cash as well as committed undrawn bank facilities.

ASX:NCM

During the reporting period, gold production increased by 25% over 1HFY22 to 1.04 million ounces, while copper production jumped by 32% to 67,023 tonnes.

Newcrest Mining interim dividend

The company aims toward a total yearly dividend distribution payout between 30-60% of free cash flow produced in the fiscal year, including yearly total dividend distribution of minimum 15 cents (US) a security based on an entire year.

Constant with the company’s commitment to methodical capital management, it has agreed that total 100% franked dividend distribution of 35 cents (US) a security would be payable on 30 March 2023. This includes an interim dividend of 15 cents (US) per share plus a special dividend of 20 cents (US) a security.

NCM stock will go ex-dividend on 24 February, as record date for the dividend is 27 February 2023.

Update on Newmont’s takeover offer

In a market notification on 6 February 2023, Newcrest informed that it has received a conditional, non-binding and indicative proposal from US gold mining giant Newmont Corporation on 5 February this year.

As per the indicative proposal, Newmont was interested to purchase 100% of the issued securities of the company through a scheme of arrangement for 0.380 Newmont securities for every Newcrest security held.

The company’s Board has contemplated the indicative proposal and collectively decided to refuse the offer as it does not represent adequate value for its stakeholders.

Newcrest’s FY2023 guidance

The company said it is on track to achieve its full-year FY23 production guidance for gold and copper, as production is expected to increase in the year's second half. Production of gold at both the sites- Lihir and Brucejack is anticipated to grow in the 2H FY2023, propelled by greater mill throughput throughout Lihir and Brucejack (contingent on enhanced rainfall at Lihir).

Total gold production for the current fiscal across all sites is expected to be between 2.1-2.4 million ounces, while copper production is expected to fall in the range of 135-155 kt.


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