22/03/2016 - 13:17

New plan boosts Perth Mint

22/03/2016 - 13:17

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State-owned Gold Corporation has revealed a $24.9 million pre-tax profit for the first half of the 2016 financial year on the back of higher volumes and cost rationalisation.

Richard Hayes has been at the helm of Gold Corporation for about nine months.

State-owned Gold Corporation has revealed a $24.9 million pre-tax profit for the first half of the 2016 financial year on the back of higher volumes and cost rationalisation.

The corporation, which runs the Perth Mint, reported revenue of $4.4 billion for that six-month period.

Both the profit and revenue numbers so far compared favourably to the 2015 financial year, when the corporation achieved revenue of $6.6 billion with a pre-tax profit of $19.9 million, the lowest pre- tax profit since 2010.

State-owned enterprises pay an income tax equivalent payment to state governments and then an additional payment of dividends are taken out of the remaining pot.

Gold Corporation chief executive officer Richard Hayes, who took over the leadership of the business on July 1 last year, said the result followed a rethink of strategy and cost rationalisation.

"We've had a very, very good six months," Mr Hayes told Business News.

He said global uncertainty had favoured the gold market, with volumes of production up.

That was particularly driven by China but also uncertainty in Europe and financial health issues in the US.

"People are turning to gold, of that there is no doubt," Mr Hayes said.

He expected a strong second half of the year, although it likely wouldn't match the exceptional first half.

Aside from cost reductions, the corporation has launched a few new business lines.

Examples of this included the launch of a depository online precious metals investment and storage platform, and the release of a new silver bullion coin manufactured in large volumes.

Competition is growing, however, particularly in Asia, and until recently the mint was the only London Bullion Market Association accredited gold refiner in Australia.

That was until ABC Refinery in Sydney, a subsidiary of private company Pallion, achieved accreditation in December last year.

Mr Hayes said the corporation had up until 15 years ago been a global player, a space where it had temporarily given ground. 

But the new strategy would put it back in that rightful place, he said. 

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