Territory Resources says its $9.9 million interim net profit was slashed by the impact of a particularly severe wet season in northern Australia.
Territory Resources says its $9.9 million interim net profit was slashed by the impact of a particularly severe wet season in northern Australia.
The iron ore miner lodged a $13.7 million net profit in the previous corresponding period.
The first half profit came from revenue of $88.5 million, on production of 860,396 tonnes from its Frances Creek operation in the Northern Territory.
In the first half of financial year 2010, Territory produced 1 million tonnes of ore, which sold for $82 million.
Territory managing director Andy Haslam said the strong performance of the spot iron ore price had enabled the company to maintain substantial cash margins on production.
"Our strategy has been to utilise this strong cash generation to reduce our corporate debt and deliver ongoing growth through exploration and acquisition," Mr Haslam said.
Mr Haslam said overall, the company's financial performance was a credible achievement in what had been an exceptionally rain-affected period.
"This is a very pleasing result, reflecting a nimble operating approach at Frances Creek," he said.
"Territory introduced a modified shipping program in late 2010, including lower-specification shipments, to maintain a consistent shipping performance during the start of the wet season and this has enabled us to deliver a solid financial result despite the heavy rains."
"We are pleased we were able to start the first half positively, as this has been a particularly big wet season.
"The rain that hit Queensland and the Northern Territory generated extremely difficult operating conditions which impacted our production and rail capabilities from late 2010.
"Consequently, we do not expect the second half results to be as strong as the first half."
On 17 February 2011, Territory announced a proposed US$20.9M debt conversion with its major shareholder, Noble Group, and also announced plans to undertake additional capital raisings to underpin growth.
Territory said the capital raisings and debt conversion would leave it with a strong balance sheet and robust cash flows that would support ongoing exploration and resource development.
