29/01/2009 - 17:38

Falling nickel price hits Independence

29/01/2009 - 17:38

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A plunging nickel price over the past six months could all but wipe out Independence Group's half year earnings as the miner releases its estimates.

Falling nickel price hits Independence

A plunging nickel price over the past six months could all but wipe out Independence Group's half year earnings as the miner releases its estimates.

In a statement issued after market close today, the company said it estimates revenue and other income to fall to $42.7 million, down from the previous corresponding period's $89.8 million.

Profit before tax for the six months to the end of December is estimated at $129,000, a dramatic plunge from its $53.9 million reached the previous year.

Independence decided to hold off on releasing an estimate for net profit after tax, saying the final result will be released with the finalised half year report out next month.

Over the six month period, the average nickel price was $US14,902 per tonne, down from the previous year's $US29,712/t.

Additionally, the company expects the half year results to include a write down of $7.1 million from its investment in Matrix Metals which was placed into administration late last year due to lower copper prices.

A $2.1 million write down from other listed investment will also be included.

Despite the news, the company stressed that its Long nickel mine is both "profitable and cash flow positive" at current nickel prices.

"The company expects the second half of the year to produce a significantly improved profit result as the mine continues to produce profits and there will be no further write down of listed investments," Independence said.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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