Atlas interim profit slumps on weak commodity prices
PERTH (miningweekly.com) - Weaker commodity prices have severely affected iron-ore miner Atlas Iron’s interim results, with the miner reporting an 81.5% slump in gross profits.
During the six months to December, Atlas reported a gross profit of A$26.3-million, compared with the A$142.2-million reported over the previous corresponding period, while underlying profits after tax declined by 98.4%, to just over A$1-million, compared with the A$62.2-million declared in the previous interim period.
Atlas said on Tuesday that sales for the half year also reached A$228.2-million, down from the A$341.3-million reported in the previous corresponding period, as revenue was impacted by weaker iron-ore prices.
Moreover, the relative strength of the Australian dollar also had a dampening effect on revenue for the half year, Atlas told shareholders.
Meanwhile, the miner also reported a net writedown of more than A$454.8-million in asset values, following adjustment of the carrying value in some of its undeveloped Horizon 1 and 2 exploration project areas and noncore tenements.
However, MD Ken Brinsden said that, despite the challenging conditions, Atlas had managed to retain a cash surplus from operations of A$70-million, with the company also starting exports from its Mt Dove mine, and development of its Abydos mine.
Atlas also shipped a record 2.24-million tons of ore during the period under review.
“The very strong recovery in iron-ore prices is now generating substantial margins, as illustrated by an unaudited cash surplus from operations of A$32-million for the month of January. Atlas is now producing at a rate of eight-million tons a year, and is on track to increase production to ten-million tons a year by the end of June,” Brinsden said.
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