Northern Star Resources (NST) rises 2% on HY report – what you missed

Companies and indices mentioned:

Northern Star Resources (ASX:NST) shares were trading nearly 2% higher today following the release of its 2020 half-year financial report.

Meanwhile, the broader Australian share market or S&P/ASX 200 (ASX: XJO) was trading at 7048, up 0.6%.

Who is Northern Star Resources?

Northern Star Resources is one of Australia’s largest gold miners, with operations in Western Australia, Northern Territory and Alaska.

NST claims to have tier-1 world-class mining projects in very promising regions thanks to their low sovereign risk. 

Featured video: how to read a financial report (in 5 minutes)

The video above, taken from Rask Education, explains how to read an annual report in a few minutes by knowing what to look for when you’re trying to understand if a company is giving you the full picture. For more free videos, subscribe to Rask Australia’s YouTube channel by clicking here – it’s free.

Key Results – Northern Star

This period Last period Change
Revenue 826.9 633.5 30.54%
Profit 126.8 82.1 54.45%
Cash flow 297.5 169.1 75.88%
Dividends 7.5 6 25%

Source: Northern Star Resources announcements; author calculations, AUD millions.

As can be seen above, the company’s revenue came in at $826.9 million, up $193 million over the prior corresponding period. To reach this sales revenue result the company sold some 398,640 ounces of gold at an average selling price of $2,046 per ounce.

At the bottom line, Northern Star Resources’s profit was $126 million, up $44.7 million. And on the cash flow statement, an important financial statement that represents the underlying health of a business, operating cash flow was $297.5 million, up $128 million.

Northern Star declared a dividend of 7.5 cents per share fully franked.

“The combination of these earnings, cashflows and overall returns is the result of our highly disciplined approach to capital investment, whether it be through exploration, development or acquisition,” Northern Star Resources’ CEO Bill Beament said.

“The fact that (sic) our EBITDA rose 45 per cent to A$322 million speaks volumes about both the strength and quality of our business.”

What Happens Next?

Looking towards the future, Northern Star said it is on track to meet its production guidance of between 920,000 and 1.04 million ounces of gold at an all-in sustaining cost (AISC) of between $1,240 and $1,340 per ounce. For context, in the first half the company’s AISC was $1,454 per ounce.

Northern Star Resources shares were last seen trading at $13.62, giving the company a market capitalisation more than $10 billion.

Online Value Investing Course - FREE!

How do you value an investment? Do you really understand what you’re investing in and why?

We’ve just updated our FREE business valuation course and made it available to investors like you. Complete with models, templates and tools, simply click here to access the course.

It’s completely free!

Disclaimer and warning: This information is published by The Rask Group Pty Ltd and contains general financial advice and information. That means, the information/advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms of Service and Financial Services Guide before using this website.

Owen Raszkiewicz

Owen Raszkiewicz

Owen is the Founder of Rask Australia, Lead Investment Analyst for Rask Invest, Head Educator at Rask Education, and Chief Banana peeler for two rabbits.