MinRes records $163m half-year profit

Mineral Resources has announced a 16 per cent lift in half-year net profit to $163 million, helped by several one-off factors including a big revaluation of its stake in lithium miner Pilbara Minerals, partly offset by impairment charges associated with its Yilgarn iron ore operation.

The Chris Ellison-led company reported revenue of $962 million for the half year to December 2017, a 22 per cent increase on the previous corresponding period, while underlying earnings before interest, tax, depreciation and amortisation (excluding the one-off factors) was $250 million.

The company said it was on track to achieve its full year guidance of $500 million in underlying EBITDA.

Included in the net profit calculations were a number of one-off items, most notably a $93.5 million revaluation of its shares in Pilbara Minerals, in which MinRes has an 8 per cent stake.

Some impairment charges were also listed, including a $46.9 million write-off for assets at the company’s iron ore project at Yilgarn.

In December, the state government rejected MinRes’s planned development of  new mining pits at its Yilgarn iron mine due to environmental concerns.

Other one-off items included the Empire Oil and Gas acquisition, valued at $9 million, and a $500,000 investment in Hazer Group.

The impairment charges also included a $6.4 million goodwill of transport and a $3.2 million impairment associated with the Empire investment.

Overall the one-off items and impairment charges boosted profits by $35.1 million.

The company also announced an interim dividend of 25 cents per share, up from 21 cents last year.

Revenues associated with mining services and processing totalled $531 million, a 75 per cent increase on the corresponding period last year, while mining revenues increased 29 per cent to $685 million.

The company said a decrease in iron ore contribution had been offset by lithium exports at Mount Marion and Wodgina.

Based on forecasts provided by MinRes, 2.7 million tonnes of ore still needs to be moved from its Yilgarn operation.

Mr Ellison said the results were in line with the company’s expectations.

“Mineral Resources has a significant long-term growth opportunity ahead as a leading and highly innovative developer and full-service provider of world class mining infrastructure services in  Australia,” he said.

Shares in MinRes finished up 4.2 per cent at $19.04.