Mineral Resources announces 55% profit forecast upgrade

Bibra Lake-based and Michael Kiernan-chaired mining services provider Mineral Resources Ltd announced a forecast 55 per cent profit upgrade at its first Annual General Meeting, held in Perth today.

The full text of a company announcement is pasted below

Diversified mining services and processing company Mineral Resources Ltd today announced a significant upgrade in its earnings guidance for 2006-07 on the strength of continued strong performances by all its businesses. The strong outlook reflects buoyant conditions in the mineral resource and contracting sector underpinned by strong commodity prices and continued record Chinese demand.

The upgrade was announced at the Company's maiden Annual General Meeting in Perth today, following its successful $22.5 million IPO and ASX listing in July this year.

The Company has forecast a net profit after tax for the 12 months to 30 June 2007 of more than $16 million, representing an increase of 55% over the $10.3 million net profit achieved for 2005-06 and 21% above its original Prospectus forecast for 2006-07. This represents nominal earnings per share of 13.3 cents.

The 2005-06 net profit was achieved on revenues of $105.9 million and represented earnings per share of 9.8 cents. The Company has declared a fully franked dividend of 1.2 cents per share, which will be paid on 15 November 2006.

Mineral Resources' Managing Director, Peter Wade, said the Company, which provides expert services to leading producers of several mineral commodities, was also on target to reduce its gearing to below 25% by mid-2007.

"Our results for the year to date are all above forecast, enabling us to pay back debt ahead of our original schedule, which means that we will have very low gearing going forward," Mr Wade said.

At today's AGM, Mr Wade also outlined plans for further geographic, production and commodity sector expansion for Mineral Resources, the procurement of additional iron sands tenements in the Philippines and the commencement of a new 5mtpa crushing plant contract in the Pilbara region of WA.

Mineral Resources has performed strongly since its ASX listing in July, with its share price increasing by almost 90%, to approximately $1.70, since opening in July at 90c.

"During the past 12 months the Board has focused on integrating and consolidating the three operating businesses (Crushing Services International, PIHA and Process Minerals International) to give Mineral Resources a solid foundation for growth as a listed company," Mr Wade said. "We are focused on improving shareholder wealth and feel that the best way to achieve this is to have an unerring customer focus and a solid operating structure.

"Our three core businesses are already highly regarded in the industry and have a strong track record spanning some 12 years, during which they have established enduring customer relationships."

Perth-based Mineral Resources Limited was formed under the chairmanship of well-known mining executive Michael Kiernan to incorporate three long-standing associated businesses, each with a strong revenue and profit base, and each positioned at the forefront of the rapidly growing Australian mining services and contracting industries.