Gold miner Northern Star Resources has outlined its new dividend policy after achieving a record profit result for the 2017 financial year.
Gold miner Northern Star Resources has outlined its new dividend policy after achieving a record profit result for the 2017 financial year.
Perth-based Northern Star posted a 42 per cent increase in net profit to $215.3 million for the 12 months to June, with revenue flat at $883.7 million.
It also achieved record earnings before interest, tax, depreciation and amortisation, up 16 per cent to $461.3 million, with all-in sustaining costs averaging at $1,013/oz.
The company elected to boost its final dividend payout by 50 per cent to 6 cents a share, for a total payout of 9 cents a share over FY17.
Managing director Bill Beament said the increased payout was part of Northern Star’s new capital management plan, which was to pay 6 per cent of revenue in dividends while maintaining a minimum cash balance of $300 million.
“We believe this approach strikes a prudent balance between ensuring we have sufficient working capital to run and invest in our business while delivering a meaningful and sustainable return to our shareholders,” he said.
“These results provide valuable insight into the company’s future cash-generating capacity and overall financial returns.
“A 42 per cent increase in net profit is exceptional in any circumstances. But this result is particularly satisfying because it has been driven predominantly by organic growth.
“Moreover, the lucrative benefits of this strategy are still unfolding, with further production increases forecast for this year and beyond.
“The ongoing production growth is underpinned by the substantial increase in our inventory which has resulted from the organic growth strategy.”
Mr Beament said the results of the organic growth strategy would not only drive production growth, but would also ensure Northern Star’s industry-leading financial returns were sustained over the long term.
He said Northern Star had budgeted $100 million for exploration and expansion work in FY18.
“We have substantial exploration upside and organic growth at all our operations,” Mr Beament said.
“But with the recent growth in our inventory, we will seek to unlock this potential which will require reduced expenditure from past years.”
Shares in Northern Star were 0.4 per cent lower to $4.96 each at 11am.
