10-QPeriod: Q2 FY2022

NEWMONT Corp /DE/ Quarterly Report for Q2 Ended Jun 30, 2022

Filed July 25, 2022For Securities:NEMNEMCL

Summary

Newmont Corporation's (NEM) second quarter of 2022 report indicates a decrease in net income attributable to stockholders compared to the prior year, primarily driven by higher costs applicable to sales, especially fuel and energy costs, and a new profit-sharing agreement at the Peñasquito mine. Despite these cost pressures, sales remained relatively flat year-over-year. The company continues to manage inflationary impacts and supply chain disruptions. Capital expenditures remain focused on development projects, with significant investments in Ahafo North and Tanami Expansion 2 projects. The company maintained a strong liquidity position with substantial cash reserves and an undrawn revolving credit facility. Financially, the period saw a notable increase in costs applicable to sales, impacting profitability. This was partially offset by higher realized gold prices and a reduction in income tax expense. The company also completed the acquisition of the remaining noncontrolling interest in Yanacocha, bringing its ownership to 100%. Investors should monitor ongoing cost inflation, operational efficiencies, and the company's progress on its strategic development projects.

Financial Statements
Beta
Revenue$3.06B
R&D Expenses$45.00M
Operating Expenses$2.52B
Operating Income$811.00M
Net Income$387.00M
EPS (Basic)$0.49
EPS (Diluted)$0.49
Shares Outstanding (Basic)794.00M
Shares Outstanding (Diluted)795.00M

Key Highlights

  • 1Net income attributable to Newmont stockholders decreased to $387 million ($0.49 per diluted share) for the three months ended June 30, 2022, compared to $650 million ($0.81 per diluted share) for the same period in 2021.
  • 2Costs applicable to sales increased significantly, up 33% to $1,708 million for the three months ended June 30, 2022, primarily due to higher commodity input costs (fuel, energy) and a $70 million Peñasquito profit-sharing agreement.
  • 3Sales remained stable at $3,058 million for the three months ended June 30, 2022, compared to $3,065 million in the prior year.
  • 4Free Cash Flow for the six months ended June 30, 2022, was $766 million, a decrease from $1,020 million in the prior year, primarily due to lower operating cash flow and higher capital expenditures.
  • 5Newmont completed the acquisition of the remaining 5% interest in Yanacocha in the second quarter of 2022, resulting in 100% ownership.
  • 6The company reported $4,307 million in cash and cash equivalents and $3,000 million in available capacity on its revolving credit facility at June 30, 2022, indicating a strong liquidity position.
  • 7All-in sustaining costs per gold ounce increased to $1,199 for the three months ended June 30, 2022, from $1,035 in the prior year, driven by higher costs applicable to sales.

Frequently Asked Questions

The primary drivers for the decrease in net income for the three months ended June 30, 2022, were significantly higher costs applicable to sales, largely due to cost inflation impacting fuel and energy prices, and a $70 million charge related to the Peñasquito profit-sharing agreement. These factors were partially offset by lower income tax expense.

Newmont maintained a strong liquidity position. At June 30, 2022, the company had $4,307 million in cash and cash equivalents and $3,000 million in available capacity on its revolving credit facility, with no outstanding borrowings. This indicates ample resources to meet operational and financial obligations.

The company acknowledges the material impact of inflationary pressures and supply chain disruptions on the global economy, specifically noting increased costs for labor, materials, consumables, and fuel/energy. Newmont is evaluating potential impacts on operations, capital expenditures, and project timelines due to these factors.

Key events included the completion of the acquisition of the remaining 5% interest in Yanacocha, bringing Newmont's ownership to 100%. The company also entered into a profit-sharing agreement at the Peñasquito mine, which impacted costs for the quarter.