Falling nickel price cuts Mincor profit

Miner Mincor Resources Ltd has reported a 36 per cent fall in net profit for the 2008 financial year to $64 million on the back of lower nickel prices.

The result was struck on gross revenues of $329 million, down from the previous year's $335 million.

The company said the reduction in earnings reflects a 33 per cent fall in average cash margins due to lower realised nickel prices, falling from $A17.28 per pound to $13.53/lb.

Earnings per share was at 32.1 cents, down from 51.3c.

The profit result is net of $12.8 million in exploration expenditure written off, as well as $11.9 million in negative net provisional pricing adjustments from the previous year.

Operational earnings were $171.2 million, down from $191 million, while earnings before interest, tax, depreciation and amortisation fell from $176 million to $141 million.

Despite the impact of the nickel price on earnings, the company has declared a fully franked final dividend of 6 cents per share - bringing the dividend payout for the 2007/08 financial year to 12 cents per share.

At the end of the period the company had a net cash balance of $112.5 million and no debt.

"Mincor is targeting production of between 19,500 and 20,500 tonnes of nickel metal in ore for the 2009 financial year," the company said.

"In line with the lower nickel price, the company has moved rapidly to switch its production focus from volume to margin, and is targeting a substantial reduction in its cash costs."

Over the 2008 financial year, cash costs improved from $6.59/lb to $6.40/lb.