Northern Star FY24 Earnings Call Highlights

Northern Star (ASX: NST) is flexing its leverage to higher gold prices after reporting a record set of FY24 results. The company anticipates sustained growth momentum, buoyed by a favorable gold price environment and the impending completion of a key project.

FY24 Earnings Summary

• Revenue up 19% to $4.9bn

• Underlying EBITDA up 43% to $2.2bn

• Cash earnings up 48% to $1.8bn

• Cash and bullion of $1.2bn as at 30 June 2024

• Record FY24 total dividend of 40 cents per share

• On-market share buyback extended for 12 months, with $128m remaining of $300m program

• FY25 production guidance of 1,650-1,800koz at AISC between $1,850-2,100

The FY24 earnings were largely in-line with Goldman Sachs expectations (25-Jul). The FY24 dividend was slightly ahead 40 cents vs. 38.5 cents forecast.

Earnings Call Highlights

The below topics have been answered by CEO Stuart Tonkin and CFO Ryan Gurner.

FY24 performance: "We are pleased to present to you today on the records that are in our control, as a result of our deliberate strategy to deliver on our purpose to generate superior returns for our shareholders."

Buyback commentary: "During the year, the company bought back $45 million of its shares through its on-market share buyback program. And I'm pleased to announce today the company is extending its $300 million share buyback program for a further 12 months."

KCGM update: "Northern Star has completed the first year of a three-year build for the KCGM mill expansion project, which will see the plant throughput increased to 27 million tonnes per annum and average 900,000 ounces of gold sold from FY29. This positions KCGM as a top five global gold mine."

FY24 dividend: "With that strength in our cash generation, a final unfranked dividend of 25 cents per share has been declared, which is up 61% from the final FY23 dividend."

Gold price commentary: "Now there are many records that we have delivered throughout the last year, but one record we can't claim credit for is the record gold pricing, and in recent days passing through US$2,500 an ounce. This is unprecedented territory."

Analyst Q&A Highlights

On buybacks: "We're just highlighting that historic price is probably not relevant to where we're sitting right now. I think what is relevant to our capital management, what we're doing with CapEx into our projects, you can see we're dividend paying. We've got a pretty clear policy on 20% to 30% of cash earnings and we know where we're growing with production."

On Kalgoorlie capex split: "It should be in the site visit presentation in August and it's off the chain. It's probably 30% underground. I mean, you've got probably another 40% the open pit and then the infrastructure around that obviously builds up to the full 100%."

Surplus cash: "... We enjoy higher gold prices. We get some surplus cash. We can utilise that through instruments like the buyback."

On inflation: "We're definitely seeing labor pressure come off a bit. We've seen stability of teams. We've seen new hires having skills coming from other sectors. And that stability, which also converts through to just performance in safety, production efficiencies."

This article was generated with the support of AI and reviewed by an editor.