Newcrest Mining has logged a staggering 90 per cent drop in net profits for the first half, although its performance has come in significantly ahead of analysts’ expectations.
The company reported that its net profits fell almost 90 per cent to $40 million for the first half of fiscal 2014, although were still significantly ahead of expectations from just several months ago.
The gold miner's underlying profits for the first half were $207 million, for a decline of 36 per cent compared to the previous corresponding period, when the figure logged was $323 million.
Newcrest's underlying profits nonetheless remained within the higher range of analysts' expectations, who anticipated a figure of between $98.7 million and $218 million.
Revenue rose by 12 per cent to reach $2.016 billion.
Shares in the gold miner saw a 1.07 per cent drop during the morning trading session following the release of the results, bringing prices to $11.14. Newcrest's shares are nonetheless still significantly higher than they were in December, boosted by gains in gold prices.
The company will not be paying out a dividend for the first half.
Despite the dive in first half net profit the gold miner still expects to be free cash flow positive in 2014 at an average realised gold price of under $1,450 per ounce, given that production and cost performance for the first half came in ahead of expectations.
The company maintains its full-year production guidance for both gold and copper, and expects to be at the higher end of the 2.3 million ounce guidance range for gold.
Newcrest's production costs for the whole first half were $1003 per ounce, while gold prices have just breached the USD$1,300 for the first time since the start of November, boding well for operating prospects in the second half of fiscal 2014.
The precious metal has risen steadily since December 2013, rising by around USD$107 over the course of the past two months.
Newcrest said that the investigation launched by ASIC into its market disclosure scandal in June last year was still ongoing.