Northern Star Resources has reported a robust half-year result with a 41% jump in net profit, driven by soaring gold prices despite operational setbacks. The company also announced a fully franked interim dividend of 25 cents per share.
- 41% increase in net profit after tax to $714.4 million
- 19% revenue growth to $3.41 billion amid higher gold prices
- Operational challenges at multiple mines impacted gold sales volumes
- Significant capital investment in KCGM Mill Expansion and exploration projects
- Interim fully franked dividend of 25 cents per share declared
Strong Financial Performance Amid Operational Challenges
Northern Star Resources Ltd (ASX, NST) has delivered a compelling half-year financial performance for the six months ended 31 December 2025, reporting a 41% increase in net profit after tax to $714.4 million. This surge was primarily driven by a 31% rise in the average realised gold price, which reached A$4,670 per ounce, offsetting a decline in gold sales volumes to 729,116 ounces from 804,140 ounces in the prior corresponding period.
Revenue climbed 19% to $3.41 billion, reflecting the favourable gold price environment. However, operational disruptions at key mines; including crusher failures at KCGM and Jundee, processing downtime at Thunderbox, and underground dilution at Pogo; contributed to the lower gold output. These isolated events are expected to be resolved in the coming quarters.
Capital Investment and Growth Initiatives
The company continued its substantial investment in growth and sustaining capital, with $671.9 million spent on property, plant, and equipment, including significant progress on the KCGM Mill Expansion Project. This project aims to increase processing capacity to 27 million tonnes per annum by FY29, underpinning future production growth.
Exploration expenditure reached $102.5 million, focusing on life-of-mine extensions and in-mine growth, notably advancing the Hemi Development Project in the Pilbara region. Northern Star also acquired Mt Roe Mining Pty Ltd, expanding its exploration footprint near Hemi.
Strategic Joint Venture for Sustainable Power
In a strategic move towards sustainability, Northern Star established a joint venture with Zenith Energy to develop a 120MW thermal power facility complemented by renewable energy assets, including wind, solar, and battery storage. This integrated power solution is set to supply the KCGM operations, with commissioning expected between FY28 and FY29, subject to regulatory approvals.
Balance Sheet and Dividend Highlights
The Group maintains a strong balance sheet with cash and cash equivalents of $865 million and undrawn corporate facilities of $1.5 billion. Despite increased capital and tax payments, free cash flow remains solid. Reflecting confidence in ongoing performance, the Board declared a fully franked interim dividend of 25 cents per share, payable on 26 March 2026.
Additionally, Northern Star completed the divestment of its 50% interest in the Central Tanami Project Joint Venture for $50 million, streamlining its asset portfolio.
Bottom Line?
Northern Star’s robust profit growth and strategic investments position it well, but operational hiccups and capital demands warrant close market attention.
Questions in the middle?
- How will operational challenges at key mines impact production in the second half of FY26?
- What are the financial and operational implications of the new sustainable power joint venture for KCGM?
- How will ongoing capital expenditure on the KCGM Mill Expansion affect cash flow and profitability beyond FY26?