MinRes posts $272m profit

Chris Ellison-led Mineral Resources has posted a big increase in profit to $272 million for the 2018 financial year, helped by a strong performance in the company’s mining services division.

MinRes reported a 35 per cent increase in net profit after tax compared with 2017, with revenue also up 16 per cent to $1.71 billion.

The company said its normalised earnings before interest, taxes, depreciation and amortisation was $507 million, up 9 per cent on the previous year.

MinRes also announced a fully franked dividend of 40 cents per share, taking the total dividend for the year to 65 cents per share, compared with 54 cents last year.

“Our financial results continue to reflect the financial strength and stability of the group’s core mining services business together with its ability to successfully bring new services and commodity projects online in record time,” managing director Chris Ellison said.

“The impact of the growth delivered this year will be seen in FY19 and beyond as we create long-term earnings capacity through the development of world-class resources assets.”

The company said it had sold 3.5 million tonnes of lithium direct ship ore from its Wodgina project, along with 382,000 tonnes of lithium spodumene from Mount Marion.

MinRes announced in May that it was looking to sell a 49 per cent stake in Wodgina and Mr Ellison said today that the company was awaiting indicative proposals.

The company recently struck a deal to purchase the Koolyanobbing iron ore mine in Yilgarn from US-based Cleveland Cliffs.

MinRes said today it was on schedule to recommence Yilgarn operations at Kooyanobbing during the first quarter of FY19.

Last month, the company announced plans to jointly develop the Marillana project with Brockman Mining, which will underpin construction of a new rail line and port facilities at Port Hedland.

Mr Ellison said today that the company was aiming to begin construction of the planned lightweight rail system, which is set to cost up to $1.6 billion to develop, in the third quarter of FY19.

A five-kilometre demonstration track is expected to be built as early as November this year.

Mr Ellison said the company had plans to offer its new rail system across the globe.

MinRes was also unsuccessful in its bids for Perth Basin-operator AWE and junior miner Atlas Iron, with Mr Ellison admitting he was “blown out of the water” on the Atlas deal.

Shares in MinRes finished off 1.12 per cent at $14.66 each today.