10 February 2022
FINANCIAL RESULTS
HALF YEAR ENDED 31 DECEMBER 2021
Strong financial position and growth path validate benefits from Saracen merger
▪ Reported net profit after tax (NPAT) of A$261 million (up 43%) driven by higher production and
portfolio optimisation. Underlying NPAT of A$108 million, excluding significant items of A$153 million.
▪ Underlying EBITDA of A$699 million, up 47% from pcp. Group Underlying EBITDA margin of 39%.
▪ Cash earnings1
of A$430 million.
▪ Cash and bullion of A$588 million. Net cash2
of A$288 million.
▪ Board declares fully franked interim dividend of 10 cents per share, up 5% from pcp.
▪ Key growth projects progressing in line with strategy to become a 2Mozpa producer by FY26, including
KCGM open pit development (Kalgoorlie) and Thunderbox mill expansion (Yandal).
Northern Star Resources (ASX: NST) (Northern Star) is pleased to report its financial results for the half year ended 31
December 2021.
Commenting on the results, Northern Star Resources Managing Director Stuart Tonkin said:
“These results cover the first full reporting period since our merger with Saracen in February 2021 and demonstrate the
potential that exists within Northern Star as we work towards our strategy to become a 2Mozpa gold producer by FY26. This
production growth, alongside a declining cost base, will be delivered organically and with one of the lowest capital intensities in
the industry.
“We delivered strong half year cash earnings1 of A$430 million and invested in our growth initiatives. The Board declared a fully
franked interim dividend of 10 cents per share, a return to shareholders of 27% of cash earnings. This return is consistent with
our capital management framework while having regard to the need of maintaining a strong balance sheet and the ability to
pursue value-adding investment opportunities.
“We remain on track to meet our FY22 production guidance, which incorporates current WA border restrictions and the
associated labour and cost impacts. During this period of continued market volatility, we are focused on operational delivery
and proactively protecting the health, safety and wellbeing of our people and those in the communities in which we operate.”
Financial result overview:
Revenue of A$1,807 million was up 63% from the prior half year, primarily due to higher gold volumes, with gold sales 289,786
ounces higher. The average realised gold price was consistent across both periods.
Cost of sales were higher than the comparative period. Generally, the increase arose from a combination of increased activity
with the inclusion of the Saracen Minerals Holdings’ merger assets in the current half (107% increase period on period), higher
average cash costs per ounce (H1 2022: A$1,256/oz vs H1 2021: A$1,196/oz) and the increase in depreciation and
1 Cash Earnings defined as Underlying EBITDA less net interest and tax paid and sustaining capital.
2 Net Cash is defined as cash and bullion less corporate bank debt (A$300 million).
ASX Announcement
2
amortisation unit costs (increase of A$291/sold oz), due to the required non-cash uplift to fair value of the merger assets,
compared to the historic cash cost of those same assets.
During the period, Northern Star made a net repayment of A$361 million of corporate bank debt. The acquisition of
Newmont’s power business was also completed in the period for total purchase consideration of A$130 million and the Group
made a C$154 million (A$170 million) investment in a Convertible Debenture with Osisko Mining Inc. The sale of the Kundana
Assets also occurred in the current half year, resulting in assets (and liabilities) held for sale at 30 June 2021 being realised for
A$402 million (and contributing a pre-tax gain of A$242 million).
Operating cash flows for the period were A$622 million. Investing cash flows excluding payments or receipts related to
business development activities (including investments and divestments) were 106 per cent higher (H1 2022: A$447 million,
H1 2021: A$217 million). Financing cash flows for the period resulted in a net outflow of A$551 million (H1 2021: outflow of
A$560 million).
The interim fully franked dividend record date is 8 March 2022, with the payment date 29 March 2022.
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DYOR
i have bought extra in the last year
so have some cash at risk again
keep an eye on those costs there will be some inflationary rises but bigger companies trend to accumulate fat and bloat