Australia's Newcrest profit slumps 88% on lower gold prices

Newcrest Mining Limited, Australia' s largest gold miner, on Friday reported an 88 percent drop in its half-year profit, dragged by lower gold prices, higher tax charge and write-downs. Newcrest made a net profit of 40 million AU dollars (36 million U.S. dollars) for the six months to December 31, 2013, down from a first-half profit of 323 million AU dollars (290.7 million U.S. dollars) a year ago. Underlying profit for the six months, excluding the write-downs, was down 36 percent to 207 million AU dollars (186.4 million U.S. dollars). The company said the benefit of a 26-percent rise in gold sales volumes was largely offset by a 13-percent lower average realized gold price compared to the corresponding period earlier. The half-year result was also hit by the increase in income tax expense of 120 million AU dollars (108.06 million U.S. dollars) and a 47 million AU dollar (42 million U.S. dollar) write-down to its exploration assets in West Africa, Newcrest said. Newcrest reaffirms its full year production guidance for both gold and copper, with gold production expected to be around the top end of the guidance range (2.3 million ounces). Newcrest Managing Director Greg Robinson said the company will continue to reduce its costs and capital expenditure across the business. "Overall, our focus remains on optimizing our current operations, maintaining our growth options and maximizing free cash flow to enable the company to reduce gearing and return to paying dividends to shareholders," Robinson said in a statement.