Iron ore miner Mount Gibson Iron has booked another half-year loss, but it’s a substantial improvement on its performance in the previous year, despite recording a $23.6 million impairment.
Iron ore miner Mount Gibson Iron has booked another half-year loss, but it’s a substantial improvement on its performance in the previous year, despite recording a $23.6 million impairment.
Mt Gibson made a $15.4 million net loss in the six months to December; a much more favourable result compared with the $870 million loss it made in the previous corresponding period.
The iron ore miner’s revenue fell 31.1 per cent to $124 million, while gross profit from continuing operations escaped negative territory, up to $12 million before tax and impairments.
It also increased its cash reserves by $11.5 million to $345.5 million.
However as a result of the continued depressed iron ore price, Mt Gibson recorded a $23.6 million impairment against its inventories, mine properties, exploration and evaluation assets, and property, plant and equipment.
Mt Gibson’s $870 million loss in the previous corresponding period was mostly attributed to $946 million in impairments associated with problems at its Koolan Island iron ore mine in the Pilbara.
The company declared no interim dividend.
Chief executive Jim Beyer said delivering an increase to the company’s cash reserves and an underlying gross profit before impairments was a significant achievement especially in light of extremely challenging conditions in the iron ore market.
“It represents a very encouraging start to the 2016 financial year,” he said.
“Mt Gibson’s ongoing commitment to cost reduction and continuous improvement have stabilised our business and helped us preserve value for shareholders as well as the company’s financial capacity and flexibility to undertake new investments in the resources sector.
“We are determined to maintain our demonstrated highly disciplined approach in order to deliver the best outcome for the company and all our shareholders in the volatile conditions which continue to prevail.”
Mt Gibson continued to implement operating strategies at its Koolan Island and Extension Hill mines to reduce costs.
All-in group cash costs fell from $76 per wet metric tonne to $49/wmt, with the average cost of goods sold for its continuing operations down 28 per cent to $44/wmt.
It maintained its iron ore sales guidance of 4.5 million-5 million wet metric tonnes for FY16.
Mt Gibson shares were 2.8 per cent higher to 18 cents each at 11:25am.
