19/08/2009 - 10:52

Iluka's $55m loss blamed on GFC

19/08/2009 - 10:52

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Mineral sands producer Iluka has posted a net losst after tax loss of $55.8 million in the half year to June 30 after cutting production earlier this year and selling its interest in Consolidated Rutile (CRL).

Mineral sands producer Iluka has posted a net losst after tax loss of $55.8 million in the half year to June 30 after cutting production earlier this year and selling its interest in Consolidated Rutile (CRL).

Excluding the profit from the sale of its stake in CRL for $23.3 million the company's earnings after tax from continuing operations would have been a loss of $78.9 million.

This $55.8 million loss contrasts with the company's $15.6 million profit in the first half of 2008.

The company said total mineral sands sales volumes for the first half of 2009 declined by 51.7 per cent compared with the first half of 2008.

This decline, most apparent in zircon, reflected a significant reduction in demand associated with global economic conditions, as well as inventory draw down in major markets.

Iluka managing director, David Robb said Iluka's first half financial results reflect the impact of the global economic crisis and Iluka's direct response to accompanying market circumstances.

Writing in the company's annual report, Mr Robb said the improvement Iluka expected to see in its earnings and cash flow has been delayed due to the global economic crisis, which brought into play both an extremely challenging sales environment across the mineral sands industry but also some opportunities to accelerate the rate of change in the business.

"Iluka is well placed to benefit from China's continuing growth and global economic recovery, with the impending completion and integration of the company's two new higher margin projects, the conclusion of the current major capital expenditure phase and the company's continued intention to invest in market development activities," he said.


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