Territory Resources has announced a $41.3 million net profit after tax for the 2010 financial year, a $112.7 million turnaround compared to the previous corresponding period.
Territory Resources has announced a $41.3 million net profit after tax for the 2010 financial year, a $112.7 million turnaround compared to the previous corresponding period.
The profit was struck on a 54 per cent increase in operating sales revenue to $175.9 million compared to $114.4 million during the 2009 financial year.
In a statement to the Australian Securities Exchange Territory said the revenue figures reflected both a 30 per cent increase in iron ore shipments for the year to 2.027 million tonnes and a strong rebound in iron ore prices.
The company said the result was the culmination of a major operational turnaround at the Frances Creek iron ore mine in the Northern Territory.
"It also signals the beginning of a new era of growth for Territory, with the Company developing a two-pronged strategy to deliver growth based on achieving further mine life extensions at Frances Creek and an acquisition program," the statement said.
See company statement below:
Australian iron ore producer Territory Resources Limited (ASX: TTY - "Territory" or "the Company") today announced a $41.3 million* net profit after tax for the 12 months to 30 June 2010, representing a $112.7 million turnaround in its financial performance over the previous year.
The outstanding result which equates to earnings per share of 15.6c (FY09: -25.5c), represents the culmination of a major operational turnaround at the Frances Creek iron ore mine in the Northern Territory combined with a rebound in iron ore prices, and prudent financial and corporate management.
It also signals the beginning of a new era of growth for Territory, with the Company developing a two-pronged strategy to deliver growth based on achieving further mine life extensions at Frances Creek and an acquisition program.
The full year profit was struck on a 54% increase in operating sales revenue to $175.9 million (FY09: $114.4 million), which reflected both a 30% increase in iron ore shipments for the year to 2.027 million tonnes (FY09: 1.563 million tonnes) and a strong rebound in iron ore prices.
Territory generated operating revenue for the year ended 30 June 2010 of $175.9 million (2009: $114.3 million), with production costs of $139.3 million (2009: $117.8 million), which include depreciation and amortisation charges of $15.9 million (2009: $17.3 million) resulting in a gross profit of $36.6 million from operations.
The strong cash generation of the Frances Creek operations enabled Territory to repay a significant proportion of its core debt, which was restructured during the year into a single US dollar denominated debt facility to Noble Resources Ltd ("Noble Facility"). As at 30 June 2010, this core debt was reduced to $38.2 million. Subject to there being no material change in current spot iron ore prices and exchange rates, the Company is targeting for the Noble Facility to be fully repaid during the 2011 financial year.
Territory completed 28 shipments of iron ore to China during the year for 2.027 million tonnes and production for the 2011 financial year is forecast to be maintained at the current annualised level of 2 million tonnes.
Territory's Managing Director, Mr Andy Haslam "thanked all staff and contractors Company wide for their efforts that had made this result possible thereby enabling the Company to finish the year with a much stronger balance sheet".
"The stronger balance sheet and cash flows being generated by Frances Creek should enable retirement of core debt in the current financial year and position the Company to pursue business growth through a commercial transaction. The Company will remain alert to any related business transaction that makes commercial sense and enhances shareholder value". Mr Haslam added.
