Strong cash earnings enabled Northern Star Resources to declare a record interim dividend for the half-year ending December 31.
The gold miner will pay out a fully-franked interim dividend of $0.11 per share on March 29, which is up from the $0.10-per-share interim dividend declared in the first half of the 2021–22 financial year (FY22).
Cash earnings increased 3 per cent to $467 million between the corresponding half-years, which contributed to a 27 per cent dividend-to-cash-earnings pay-out ratio (Northern Star dividend policy: 20–30 per cent).
Underlying EBITDA (earnings before interest, taxes, depreciation and amortisation) was down 12 per cent from $721.5 million to $632.7 million amid heightened cost challenges.
“The strength and resilience of our world-class gold assets in Western Australia and Alaska were on show in the first half and delivered significant cash earnings despite the industry wide cost pressures,” Northern Star managing director Stuart Tonkin said.
“This has enabled the board to declare a record interim dividend of 11 cents per share, at the top end of our dividend policy and complementing the $300 million share buy-back that commenced during the half.”
Northern Star commenced its first on-market buy-back in September 2022, which it said would be completed within a year. The buy-back was 42 per cent complete ($127 million) when its half-year results were released.
Half-year revenue of $1.95 billion (up 5 per cent from the prior half year) came as Northern Star enjoyed a higher average gold price of $2513 per ounce (oz), compared with $2388/oz in the first half of FY22.
Volume of gold sales (773,243oz) was on par with the previous half-year (778,815oz). Tonkin said Northern Star continues to advance its growth strategy en route to becoming a 2-million-ounce-per-annum gold producer by FY26.
“Key growth projects Pogo and Thunderbox are delivering significant cost improvements,” Tonkin said. “A continued focus in the second half on costs across all three operating centres, alongside the expected lift in group production to meet our FY23 guidance, should further build cash to maintain Northern Star’s strong financial position.”
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