Newmont (NEM) Q4 2017 earnings summary

Executive summary

• 2017 attributable gold output rose 8% to 5.266 million oz; operating cash flow from continuing operations was $2.35B and free cash flow was $1.484B.

• Adjusted net income was $780M ($1.46 diluted share) and adjusted EBITDA was $2.653B; reported continuing-operations loss attributable to shareholders was $60M.

• Q4 sales were $1.935B; continuing-operations loss was $534M and net loss attributable to shareholders was $527M, amid major tax-reform charges.

Financial highlights

• Sales rose to $7.348B from $6.711B in 2016; gold sales increased 9%, reflecting higher volume and realized prices.

• Adjusted net income increased 26% YoY to $780M; adjusted EBITDA rose 12% to $2.653B.

• Net cash from continuing operations increased 22% to $2.350B; free cash flow rose 88% to $1.484B.

• Reported continuing-operations net loss attributable to shareholders narrowed to $60M from $220M; diluted EPS improved to $(0.11) from $(0.41).

• Gold and copper sales were $7.033B and $315M; average realized prices were $1,255/oz and $2.83/lb, respectively.

Outlook and guidance

• 2018 attributable gold production target: 4.9–5.4 million oz; priorities include cash generation, cost and capital discipline, higher-margin ounces and reserve replacement.

• The five-year outlook calls for steady gold production at competitive costs, supporting investment in the mine pipeline and higher shareholder dividends.

• The 2018 dividend plan called for at least a 50% increase; the gold-price-linked calculation was eliminated and a Q4 dividend of $0.14/share was declared, subject to Board discretion.

• Subika Underground commercial production was expected in H2 2018; Twin Underground in mid-2018; Ahafo Mill Expansion in H2 2019; and Quecher Main in Q4 2019.