Atlas shares down despite return to profit

Shares in Atlas Iron fell 9.3 per cent today despite the company returning to after-tax profit in the six months to December on the back of higher volumes and a lift in the iron ore price.

It comes less than a year after the company underwent a restructure.

Atlas reported a net profit after tax of $18.9 million, with earnings before interest, tax, depreciation and amortisation of $66.2 million.

That compared with a half-year loss of $114.3 million in the 2016 financial year and EBITDA of $20.5 million.

Exports were up 17.4 per cent to 8.1 million tonnes, while the rising iron ore price also boosted the company, with Australian dollar receipts up 12.3 per cent to $66.35 per tonne.

Those two factors grew revenue 34 per cent to just less than $500 million.

On the flipside, cash costs fell from $55.75/t to $52.30/t.

Atlas managing director Cliff Lawrenson, who started in the role this year, said it was a turning point for the company.

He said the company had made debt repayments of $71 million, reducing term loan facility debt to $118 million.

Mr Lawrenson said the second half had started with challenging weather conditions and high rainfall, but he was confident Atlas would hit its 14-15wmt production guidance.

One further issue was that discounts on lower grade ore were increasing, he said, meaning Atlas received a lower rate than the market price of ore.

That gap should close over time, Mr Lawrenson said.

Shares in Atlas Iron traded at 3.9 cents each at the close of trading.