Gold miner Newcrest plans to reward shareholders with higher dividends when its two major expansion projects move into full production.
Shares in Australia's biggest gold miner rose five per cent on Friday after Newcrest's first half profit met analysts' expectations even though the result was down 51 per cent on the previous corresponding half year.
Newcrest reported a net profit of $320 million in the six months to December 31, down from $659 million previously due to weaker production and sales.
Chief executive Greg Robinson said the half year result represented a transition period for the company as it moved to commission its Cadia East project in central western NSW and Lihir assets in Papua New Guinea (PNG).
The progress of its Lihir project will determine whether the company achieves its full year targets.
"The focus for the company very much is maintaining a strong discipline on the operations and ensuring the big investments we've made give us adequate returns," Mr Robinson told reporters.
"We're looking to reward shareholders over the medium term from that expansion of the existing operations."
Over the past three years, Newcrest delivered a higher dividend in the second half and it was intent on rewarding shareholders following its significant investments.
"Over time we would like to lift our dividend," Mr Robinson said.
Newcrest plans to focus on its longer-term Wafi-Golpu project in PNG, as it completes landholder agreements and moves into its feasibility stage next year.
Morningstar analyst Mathew Hodge said Newcrest had met market expectations and investors had backed the profit result because there were no nasty surprises.
"The market's been obsessed over whether they're going to meet their guidance or not and what happens in 2013, to an extent is not really that important," Mr Hodge said.
"What matters is that in the next six months, 12 months, two years, they really get production going well. That's key."
He said Newcrest could be re-rated once production increased at Cadia Valley and Lihir.
Newcrest expects production and profits to rise in the second half of the financial year as new projects begin production and existing assets improve their performance.
Subject to metal prices and exchange rates, margins and profitability should improve with the commercialisation of the company's two major projects.
The Cadia East mine started commercial production on January 1.
The company declared an unfranked interim dividend of 12 cents per share, in line with the previous year.
Newcrest shares closed $1.17, or 5.01 per cent higher at $24.52 on Friday.