Australia's biggest gold miner has posted a drop of almost a quarter in full-year profit for 2022 and warns the short-term outlook for costs remains "unpredictable".
Newcrest Mining reported on Friday an underlying profit of $US872 million ($A1.26 billion) for the year ended June 30, down from $US1.16 billion a year earlier.
The flagship Cadia mine has now returned to full capacity, Newcrest Managing Director and Chief Executive Sandeep Biswas told a webcast.
"We were particularly pleased with our costs trending lower in the second half of the year, with Cadia achieving its lowest ever annual All-In Sustaining Cost of negative $US124 per ounce," he said.
"We finished the year strongly."
Newcrest would also benefit from a substantial and increasing exposure to copper, a critical metal that would allow the company to tap into the global shift to decarbonisation, he said.
Newcrest shares rallied 81 cents or 4.3 per cent to $19.48 in afternoon trade.
Just under two million ounces of gold was produced across operations, down on the year before, at a cost of $US1,043 per ounce.
Chief Financial Officer Sherry Duhe told analysts the "solid performance" came despite COVID-19 supply chain issues and significant rainfall that hit production.
Guidance from Newcrest points to a lift in gold production to 2.1 million to 2.4 million ounces of gold in FY23.
But Newcrest warned of continued cost factors because of "acute inflationary pressures" across a range of inputs, including oil, gas and steel, and higher wages driven by a tight labour market.
"In FY23, we estimate inflationary pressures will increase our cost base by around six to eight per cent, so the short-term outlook for cost forecasts remains unpredictable," she said.
David Xu, analyst at Moody's Investors Service, said Newcrest's cost position remains competitive in the sector, providing a good buffer against downside risk in gold prices.
Newcrest is also expected to benefit as it beds down the Pretium Resources acquisition, including one of the world's highest-grade gold mines - Brucejack in the Golden Triangle of Canada's British Columbia.
Mr Xu said the Brucejack mine would improve production and earnings diversity, and reduce Newcrest's reliance on its Cadia operations near Orange in NSW and Lihir in Papua New Guinea.
Newcrest announced a fully franked final dividend of 20 US cents per share, bringing the total dividend to 27.5 US cents per share.
