The 1988 quarterly earnings, however, include net income of $111.1 million from earnings on discontinued operations and from the disposition of assets undertaken as part of Newmont’s debt reduction program.
During the recent quarter, sales revenues reached $132.2 million, a 43% increase over 1988 first-quarter results.
Although the company reported a hefty 62% increase in gold production, to 322,900 oz from 198,800 oz in 1988, the average price received per oz of gold declined to $405(US) from the $453 received in the 1988 first quarter.
The decline in gold prices affected the company’s overall profitability as costs increased in proportion to the production increase. The company did manage to trim its debt to $1.2 billion during the recent quarter, down from $1.7 million in the same period a year ago.
In addition, the company was able to refinance $448 million of debt by a gold loan with an interest cost of less than 3%, which favorably affected the 1989 quarter.
Newmont’s gold interest include 90%-owned Newmont Gold and 75%-owned Newmont Australia. Newmont also has a 49.97% interest in Peabody Holding Company, the largest coal producer in the U.S., which reported first-quarter income of $12.6 million.
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