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Newmont 4Q adjusted profit jumps as output, prices rise

Kitco News

Editor's Note: Updating earlier story with more details from Newmont's earnings release and analyst comment.

(Kitco News) - Newmont Corp. (NYSE: NEM, TSX: NGT) reported Thursday that its fourth-quarter adjusted net profit nearly doubled from a year ago – topping expectations – as both production and gold prices rose.

Newmont Corp. (NYSE: NEM, TSX: NGT) reported Thursday that its fourth-quarter adjusted net profit nearly doubled from a year ago – topping expectations – as both production and gold prices rose.

The world’s largest gold-mining company said its adjusted profit came in at $410 million, or 50 cents a share, during the October-January period. This was up from $214 million, or 40 cents, a year earlier.

The result beat the consensus estimate, which Credit Suisse said was 47 cents a share.

“We expect a modest positive reaction to the headline EPS [earnings-per-share] beat in what was otherwise a neutral release,” Credit Suisse added.

Newmont said its net income from continuing operations was $537 million, or 66 cents a share, in the fourth quarter. Revenue increased 45% to nearly $3 billion, primarily due to new production from the acquired Goldcorp assets and higher gold prices, the company said.

Newmont closed on the Goldcorp acquisition in mid-April. Then in July, Newmont and Barrick Gold Corp. formed a joint venture for the two companies’ assets in Nevada.

Newmont’s fourth-quarter gold production rose 27% year-on-year to 1.83 million ounces, and the average realized price climbed to $1,478 from $1,233 a year earlier. October-December all-in sustaining costs came in at $946 an ounce.

For full-year 2019, the company produced 6.3 million ounces of gold and reported all-in sustaining costs of $966 per ounce, in line with Newmont’s guidance. The company said it projects output of 6.4 million ounces in 2020 at AISC of $975 an ounce, then 6.2 million ounces to 6.7 million ounces per year longer term through 2024.

For all of 2019, Newmont listed adjusted net income of $970 million, or $1.32 per share, up from $718 million, or $1.34, a year earlier. Fourth-quarter net income was $2.9 billion, or $3.91 per share.

“In 2019, Newmont generated $1.4 billion in free cash flow…and we continued to deliver on our promises by completing four projects on four continents within budget,” said Tom Palmer, president and chief executive officer. “We returned $1.4 billion to shareholders through dividends and share repurchases and as we enter our centenary year, Newmont is well positioned with the industry’s largest reserve base strategically located in top-tier jurisdictions that enables us to sustain production and generate robust cash flow across price cycles.”

The company said it ended the year with an industry-leading 100.2 million ounces of gold mineral reserves.

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