Northern Star Resources Full Year Result: NST organic growth drives record profits

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Northern Star Resources (NST) reported a slightly better than expected record net profit result of $215.3 million, up 42% on the prior year. The headline profit result included the 26.4 million from its Plutonic mine sale in October 2016.

 Northern Star beat the streets expected Revenue, Earning Before Income Tax, Depreciation and Amortisation (EBITDA) and EBITDA Margin of 52% from 45% over FY16. Strong cost management and a lift in the average price of gold sold allowed Northern Star to pay out a higher than expected dividend.

 NST sold 526,515 ounces of gold, down from 561,153 the same time last year. The average gold price for the year traded higher at $1,675 an ounce compared to $1,578 an ounce the year before. Northern Star expects its FY18 production to increase to 600,000 ounces per annum and expects to spend $100 million for exploration and expansionary capital as part of its ongoing organic growth strategy. Operating cash flow was also up by 9% to a record $435.3 million.

 Northern Star’s CEO Bill Beament said “Maximising financial returns is the ultimate objective of everything we do and the success of our organic growth strategy, which has given us mine life visibility of 10 years, helps ensure we can deliver these results for a long time to come.”

 Northern Star recently lifted its total reserves up by 2.3 million ounces (Moz) to 3.5Moz and NST’s resources increased by 2.7 Moz to 10.2 Moz. With expanded inventory and upgraded production capacity positions, NST now expects the Jundee and Kalgoorlie operations to each produce ~300,000ozpa within the next two years.

 NST announced a 50% increase on its final dividend to $0.06 per share which is payable on 13 September 2017.

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