Newmont (NEM) Q4 2018 earnings summary

Executive summary

• Attributable gold output was 5.1 million oz at AISC of $909/oz; lower grades and leach volumes reduced production 3% YoY.

• Continuing-operations cash generation reached $1.8B, including $805M free cash flow; year-end cash was $3.4B.

• Seven colleagues died in 2018; safety controls and fatality prevention remained central priorities.

Financial highlights

• Sales were $7.253B, down 2% YoY; gold sales fell 2% and copper sales fell 4%.

• Continuing-operations net income attributable to stockholders was $280M, or $0.53 diluted EPS, versus a $76M loss and $0.14 loss per share in 2017.

• Adjusted net income was $718M, or $1.34 diluted EPS, down 8%; Adjusted EBITDA was $2.584B, down 2%.

• Operating cash flow from continuing operations was $1.837B, down from $2.139B; free cash flow was $805M versus $1.273B.

• Reported net income attributable to stockholders was $341M, including $61M from discontinued operations.

Outlook and guidance

• Priorities were steady attributable gold production and competitive costs, delivering the Ahafo Mill Expansion, Quecher Main and Tanami Power, and advancing profitable projects and exploration.

• Ahafo Mill Expansion commercial production was expected in 2H19; Quecher Main reached first gold in late 2018, with commercial production expected in 2H19.

• Tanami Power was expected to lower energy costs and emissions by 20% and mitigate fuel-supply risk; the project was progressing toward operation in 2019.