PERTH (miningweekly.com) – Falling iron-ore prices have resulted in ASX-listed Arrium Mining and Materials reporting a net loss after tax of A$1.9-billion for the financial year ended June, compared with a net profit of A$205.4-million in 2014.

The net loss included a A$1.79-billion asset impairment and restructuring costs, the company said.

In the year under review, Arrium restructured its mining business in view of the low iron-ore price environment, which lowered the company’s average cash break-even price to around $47/t for the Middleback Ranges export operation, in South Australia.

The redesign work included the mothballing of the Southern Iron mining operation and optimising the lower-cost Middleback Ranges operation to deliver about nine-million tonnes a year of iron-ore.

The average iron-ore price index was down some 41% to $72/t, which resulted in mining earnings before interest, taxes, depreciation and amortisation (Ebitda) declining by around A$600-million, to A$90-million.

“The year has been a very challenging one. We recorded stronger performance in both mining consumables and steel, as expected; however, earnings for the company on both an underlying and statutory basis were significantly affected by the deterioration in iron-ore prices,” Arrium MD and CEO Andrew Roberts said.

In its mining consumables division, Arrium reported a 13% increase in underlying Ebitda, reaching A$211-million, as sales volumes grew and margins remained stable.

A 22% increase in the Ebitda was also reported for Arrium’s steel division, reaching A$62-million for the full year, driven by cost reductions and lower prices for steelmaking raw materials.

Meanwhile, Arrium, in June, launched a strategic review with the aim of strengthening its balance sheet and its ability to manage through a period of low iron-ore prices. The review included addressing options to achieve an appropriate structure and debt level and included the potential divestment of significant assets or businesses.

Arrium said on Wednesday that the company was currently progressing work on this review and, thus far, had received expressions of interest on a number of assets across its portfolio, most significantly the mining consumables division.

The company has now launched an investigation into the nature of this interest to make an assessment on whether a transaction would be in the interest of shareholders.

Arrium earlier this year divested of its wire-rope business to a Belgium-based firm for A$90-million.