Evolution Mining Reports 49% Decline in Annual Net Profit

Australian gold producer Evolution Mining has announced a significant decrease in its annual net profit due to unforeseen circumstances. Heavy rainfall caused the partial flooding of its Ernest Henry operation in March, resulting in the evacuation of the underground mine and a lengthy recovery process.

For the year ending in June, Evolution Mining recorded a net profit of 163.5 million Australian dollars (US$105.0 million), down from last year's figure of A$323.3 million. Directors have declared a final dividend of 2.0 Australian cents per share, compared to 3.0 cents in the previous year.

Chief Executive Lawrie Conway commented, "The FY23 results were impacted by a number of external events partially offset by higher metal prices." Earnings before interest, taxes, depreciation, and amortization also saw a decline of 6%, reaching A$844.5 million.

Evolution Mining fell short of its revised annual gold production and cost targets, attributing the shortfall to the disruption caused by the wet weather at the Ernest Henry mine. The company produced 651,155 troy ounces of gold over the 12-month period, below the estimated 660,000 ounces provided to investors in April. Copper output and all-in sustaining costs also missed their expectations.

Although Ernest Henry returned to full capacity by the end of June, the heavy rainfall cost Evolution Mining approximately A$160 million in lost revenue and an additional A$24 million in recovery costs.

Looking ahead, the company aims to increase its gold and copper production while reducing costs during the current fiscal year. Conway stated, "In FY24, planned lower capital expenditure profile, anticipated lower all-in sustaining costs, and higher production levels will see us move to stronger cash generation. This is underpinned by the move into commercial production of our recent projects at Cowal and Red Lake, and the resumption of normal operations at Ernest Henry."