Nickel miner Western Areas has returned to profitability and delivered a dividend payout, with plans to increase its exploration spending in the year ahead.
Nickel miner Western Areas has returned to profitability and delivered a dividend payout, with plans to increase its exploration spending in the year ahead.
Western delivered a net profit of $19.3 million for the 12 months to June, a turnaround result from its $29.8 million loss in FY16.
Revenue was 2 per cent higher to 213.9 million, with the company declaring a final dividend of 2 cents a share.
Not interim dividend was paid.
Western has also foreshadowed an increase in exploration investment for FY18, including at its Forrestania operation, where it plans to convert resources to reserves and extend the life of its Flying Fox mine.
Managing director Dan Lougher said that the company welcomed the return to profitability and the payment of a final dividend to shareholders following a year of significant achievement.
“Western Areas set out in FY17 to maintain a strong financial position and give priority to maximising cash generation,” he said.
“We achieved this through measures such as the planned deferral of certain capital expenditure in the first half of the year and the implementation of various efficiency projects driven by our operations team.
“I am pleased that the Western Areas team has reliably delivered on all these promises, and accordingly, we have now achieved seven consecutive years of delivery to guidance or better.”
Mr Lougher said government policy instability, particularly in Asia, had affected nickel prices; and while Western didn’t ignore the external environment, it remained committed to setting up the company for growth.
“This has been achieved with our portfolio of opportunities expanding and our balance sheet being in better shape than ever before,” he said.
“Following the nickel price hitting a low of around $US3.90/lb in June 2017, the beginning of FY18 has commenced positively with the August 2017 price currently averaging $US4.75/lb.
“Pleasingly, strong demand in the high end stainless steel market, particularly in China, has remained robust, whilst the activity in the electric vehicle battery market is growing exponentially.
“We have witnessed the EV supply chain demand first hand with the level of in‐bound enquiry for nickel offtake supply increasing markedly over recent months.
“The tone of innovation continues into FY18, with the company currently on target to commission the new mill recovery enhancement project in the March 2018 quarter.
“We are effectively creating a product for the EV battery supply chain from a specific cut of the live tailings stream that was previously discarded.”
Western shares were 4 per cent higher to $2.58 each at the close of trade.