Nickel sulphide producer Panoramic Resources has increased its net profit after tax for the 2010 financial year from $50.6 million to $56.2 million.
Nickel sulphide producer Panoramic Resources has increased its net profit after tax for the 2010 financial year from $50.6 million to $56.2 million.
The result is the second highest net earnings result in Panoramic’s history.
The company’s net cash flow from its operations before tax was $131.8 million up $47 million on the previous corresponding period.
In its annual report Panoramic said the profit reflected another year of solid group nickel production combined with ongoing tight control of operating costs.
Panoramic Resources declared a final fully franked dividend of 6.5 cents per share.
See company statement below:
Panoramic Resources Limited (“Panoramic”) is pleased to announce a net profit after tax (NPAT) for 2009/10 of $56.2 million. This represents the second highest net earnings result in the Company’s history, and reflects another year of solid group nickel production combined with ongoing tight control of operating costs, and the earnings contribution of a well executed hedging program.
Panoramic has delivered a strong financial result on the back of solid production from both operations. A combination of improved global commodity prices together with the $34.1 million hedge book contribution to pre-tax earnings, resulted in the Company achieving a 14% increase in the average realised nickel price of A$10.50/lb compared to last year. Overall, net sales revenue (including interest income) was up 26% on last year to $287.8 million. EBITDA was 50% higher than FY2008/09 at $123.8 million, while depreciation and amortisation was up 7% to $52.7 million, resulting in a gross profit of $71.1 million (up 124% compared to last year). Since the introduction of the cost reduction strategy during FY2008/09, the operations have kept a firm control on costs. The Group’s payable operating costs averaged A$5.46/lb nickel over the year.
The Company made a $7.2 million (before tax) reversal in respect of the $12.8 million pre-tax impairment against the Savannah Project’s non-current assets recognised in the FY2008/09 financial statements. The major factors leading to the impairment reversal
are the improvement in the global economy and the outlook for commodity prices, the robust economics of the Savannah Lower Zone Ore Reserve based on forecast operating costs and commodity prices, and the strong financial position of the Company.
The pre-tax Savannah impairment charge of $12.8 million recognised in FY2008/09 has been adjusted for notional depreciation from 1 January 2010, resulting in the adjusted reversal amount at 30 June 2010 of $7.2 million. The $13.5 million pre-tax impairment charge against Panoramic’s 60% interest in the Copernicus Project is to remain while that project is on care and maintenance.
Cash flow from operating activities before tax was a solid $131.8 million (up 86% on last year), while net assets increased marginally to $291.1 million. Net cash inflows included $4.4 million of interest income, and cash outflows of $8.8 million for exploration activities. The Company has a very strong balance sheet, after adding $62.4 million this year to cash and current receivables, totaling $158.3 million as at 30 June 2010. The Company has no bank debt and only $4.7 million in finance leases.
Final Dividend Declaration
In light of the strong profit result, the Company has declared a fully franked final dividend of 6.5 cents per share, bringing the total dividend payout for the 2010 financial year to 16.5 cents per share (fully franked), representing a pay-out ratio of 60%. The Board is pleased to be able to maintain the payment of fully franked dividends to shareholders that now total 43.5 cents per share over four consecutive financial years.
Details of the final divided are as follows:
Ex-Dividend Date – Monday 6 September 2010
Record Date – 5.00pm (WST) Friday 10 September 2010
Payment Date – Friday 24 September 2010