By David Winning

SYDNEY--Newcrest Mining Ltd. lifted its dividend and said its annual profit rose by 15%, as the surge in gold prices more than offset weaker production of the precious metal.

Newcrest, one of the world's largest listed gold producers, reported a net profit of US$647 million for the 12 months through June, up from US$561 million in the 2019 fiscal year. Directors of the company declared a final dividend of 17.5 U.S. cents a share, up from a payout of 14.5 U.S. cents a year earlier.

"Our operational and financial performance, strong balance sheet and outlook has allowed us to increase our dividends to shareholders for the fifth consecutive year, with the full-year dividend being 14% higher than last year," said Chief Executive Sandeep Biswas.

Newcrest's stock has risen by roughly one-third since it hit a one-year low in March, fanned by a historic rally in gold prices as investors sought alternatives to low-yielding bonds and a haven from the economic downturn caused by coronavirus. The front-month gold contract on the Comex exchange settled at US$1,956.70 a troy ounce on Thursday, and has risen 29% since the start of January.

For Newcrest, the soaring gold price has helped to mask some operational difficulties during the year. Annual gold output of 2.17 million ounces was within guidance, but management had revised that target lower in mid-March.

Newcrest encountered lower-than-expected ore grades at the Lihir mine in Papua New Guinea, while the operation was shut down several times in the December quarter as management sought to improve equipment reliability and utilization. Output at the Telfer mine in Australia at times also disappointed, prompting corrective action plans to be put in place at both operations.

However, both operations showed signs of improvement in the June quarter, while Newcrest's Cadia mine in eastern Australia beat its annual output goal following a strong finish to the fiscal year.

The miner said its margin on earnings before interest and tax increased to 30.4% during the 2020 fiscal year, up from 24.7% in the year-earlier period.

Newcrest said it expects gold production to fall in the new fiscal year, projecting output of 1.95 million-2.15 million ounces of gold. The company also forecast 135,000-155,000 metric tons of copper. 



  Write to David Winning at david.winning@wsj.com