Northern Star reports 41% jump in HY profit despite 'soft' performance
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The news: Gold miner Northern Star Resources posted a half-year statutory profit of $714 million, a 41% increase year on year, even as the company experienced a "soft operating performance" during the period.
The result came in below the $758.9 million consensus estimate, according to Visible Alpha.
The company also reported negative underlying free cash flow of $320 million, including $275 million of tax payments relating to the prior period and growth project investments.
Northern Star declared an interim dividend of 25 cents per share, topping estimates of 20 cents and flat with a year earlier.
The context: Northern Star said the positive profit result was driven by a 31% increase in average realised gold price year over year. Gold sold was lower than the prior corresponding period at 729,000 ounces, compared with 804,000 ounces.
Cost of sales also increased, due to higher mining activity across the group at both its underground and open pit operations, as well as inflation hitting labour and contractor rates across the group.
A non-cash impairment charge of $77.6 million was recognised in relation to exploration and evaluation assets.
What they said: "This first half result demonstrates the resilience and growing returns we are embedding in our business, which allowed the board to declare a 25 cent-per-share interim dividend despite a soft operating performance," said Northern Star managing director Stuart Tonkin.
"Our balance sheet remains in a net cash position notwithstanding the significant investments we are making to transform Northern Star into a lowest-half global cost producer."
The source: ASX
