Midwest Corporation posts $2.1m profit

Shares in West Perth-based iron ore developer Midwest Corporation Ltd rose 6.5 per cent, after the company announced it had made a net profit after tax of $2.1 million for the year ended December 31, 2006.

The full text of a company announcement is pasted below

Emerging iron ore producer and developer, Midwest Corporation is pleased to report its maiden net profit after tax of $2.1 million for the year ended 31 December 2006.

Sales revenue of $33m reflected the shipment of 744,000wmt of iron ore fines from the Port of Geraldton to China, which commenced in February 2006. Taking into account the normal build up at the start of operations, this was a creditable result.

A pleasing EBTDA of $9.4m was recorded before taking into account the impact of non-operational and one-off costs including those associated with employee share options and early termination of a contract.

Net profit was significantly impacted by compliance with the State Government's requirement that the company make the transition from road to rail by September 2007 including:

Commenting on these results, the company's CEO, Bryan Oliver said, "Whilst 2006 has been a year in which the company made huge progress, it involved significant issues which have impacted on profitability. The transition from road to rail and high infrastructure expenditure has been costly for Midwest.

The company plans to expand its current operations to 2 million tonnes per annum and the sale of lump product from the start of 2008 will greatly improve profitability," he said.

Mr Oliver also said that the company has made considerable progress during 2006 by positioning itself to become a world class exporter and developer of iron ore. It is now well placed to deliver organic growth through the development of its hard rock mining program at Koolanooka/Blue Hills flowing into the high quality projects at Weld Range and Jack Hills which will provide maximum
exposure to haematite direct shipping ore.