13/08/2009 - 15:16

Mount Gibson books 62% profit slump

13/08/2009 - 15:16

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Mount Gibson Iron has recorded a 62 per cent slump in full-year net profit after tax as it continues arbitration proceedings with former customers over termination of offtake deals.

Mount Gibson Iron has recorded a 62 per cent slump in full-year net profit after tax as it continues arbitration proceedings with former customers over termination of offtake deals.

In its final 2009 financial year report out today, Mount Gibson posted a net profit of $42.6 million.

Sales revenue for the year was down 2 per cent to $425.4 million while operating profit before tax was $61.7 million, down 62 per cent on the previous year.

Cash on hand at the end of the reporting period was $222.2 million.

No dividend will be paid.

During the reporting period, Mount Gibson formally terminated offtake agreements with three customers, Pioneer Iron and Steel Group, Rizhao Steel Holding Group and Sinom (Hong Kong).

Today the miner said arbitration proceedings are currently underway with each of the three customers.

"Mount Gibson is seeking to recover the losses it claims arising from the termination of the agreements," the miner said.

"Two of these former customers have issued counterclaims on the basis that the termination by Mount Gibson was not justified.

"Mount Gibson is confident that the counterclaims are without substance.

"The arbitrations are progressing and it is unlikely that there will be final determinations by the end of 2009."

Late last year, Mount Gibson announced that a number of its customers had failed to collect iron ore cargoes as part of the binding agreements.

 

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