Continued cost reduction is one of the main pitches that Newcrest is making to investors, given gold production and free cash flow are not forecast to improve noticeably in the 2015 financial year, and a resumption of dividend payments does not appear imminent. ”We will see continuous improvement in our labour productivity but it is unlikely to be the order of magnitude of 22 per cent.
UBS analyst Jo Battershill said Newcrest was relying heavily on cost cuts to remain cash-flow positive under its current strategy. ‘‘It’s a cost-out story; the bottom line improvement and cash-flow improvement for investors has to come from the company operating assets better and stripping some more costs out,’’ he said.
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