Reporting Season

Earnings Wrap: Newcrest and REA Group profits fall but ahead of analyst estimates

Fri 11 Aug 23, 9:57am (AEST)

Newcrest: Beats expectations, pumps dividend

Newcrest Mining (ASX: NCM) posted an FY23 net profit of $778 million, down 11% year-on-year but well ahead of the $676 million expected by analysts.

The gold miner also declared a final dividend 20 cps, fully franked, with the record date 21 August and the pay date 18 September.

Revenue came in at $4.51 billion, which was largely in line with estimates, whilst EBITDA beat, coming in at $2.06 billion against expectations of $2 billion. Free cash flow came in at $404 million vs year-ago ($868M)

FY24 Guidance:

  • Gold production 2.0 - 2.3Moz

  • Copper production 120 - 140Kt

From the CEO: “FY23 has been a transformational year for Newcrest. We made significant progress against our growth strategy with key study milestones achieved at Cadia and Lihir, the signing of the Framework MOU at the world-class Wafi-Golpu copper-gold deposit, and continued success realised through the Brucejack transformation program”.

REA: Profits down but better-than-feared

REA's (ASX: REA) FY23 net profit fell 9% year-on-year to $372 million, reflecting one-off impacts such as restructuring and acquisition integration costs. Despite the decline, the profit figure beat analyst expectations of $369 million.

  • Revenue rose 1% to $1,183 million vs. $1,180 million expected

  • EBITDA fell 3% t o$651 million vs. $638 million expected

  • Final dividend of 83 cents per share, fully franked

The top line growth was underpinned by the strong performance of REA India, with revenues up 46% year-on-year, offset by weakness across in Australia.

In Australia, national listings declined 12% year-on-year in FY23, with declines reaccelerating in the fourth quarter to -18% from -12% in the third quarter.

Outlook:

  • "Seller confidence continues to be impacted by interest rate uncertainty, and a lack of supply of property inventory to both buy and rent."

  • "However, demand remains strong, with the Australian residential property market experiencing healthy auction clearance rates and property prices returning to growth in 2023."

  • "July National residential new Buy listings were down 5% YoY, with Sydney and Melbourne listings both increasing by 9%."

  • "Full year positive operating jaws are targeted for the Group."

  • "Operating cost growth for both Australia and India is expected to increase high single-digits to low double-digits, reflecting employee cost increases and technology cost inflation."

Baby Bunting: Profit slide, cuts dividend

Baby Bunting (ASX: BBN) reported an almost 50% profit slide for FY2023, statutory net profit after tax coming in at $9.9 million for the period.

Earnings before interest, tax, depreciation and amortisation of $31.2 million also fell, down 38.2% on the prior corresponding period, as sales volumes and margins were knocked by cost-of-living pressures.

Management last month flagged these pressures and cut its guidance after its latest “Storktake” June sales initiative missed the mark.

“While our category is less discretionary, our customers are not immune to cost-of-living pressures and we experienced sales decline towards the end of the year as consumer spending slowed,” said Baby Bunting’s acting CEO Darin Hoekman.

  • Total sales of $515.8 million for the full year nudged just 1.7% above the prior year’s figure and comparable store sales were down 3.6%.

  • For the last six weeks of trade, total sales growth was negative 4% and comparable store sales were negative 9%.

  • A fully franked dividend of 4.8c per share was flagged, cut from 7.5 cents a year ago

Management indicated costs of doing business were up $16.5 million against the prior corresponding period, with the key contributors:

  • New and annualising stores,

  • Cost inflation (including wage inflation) and

  • one-off establishment costs associated with the marketplace and launching in New Zealand.

Management declined to provide forward guidance, citing the ongoing outlook for “economic uncertainty and a challenging trading environment” in FY24.

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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