JOHANNESBURG (miningweekly.com) – ASX-listed BC Iron on Wednesday reported a net profit after tax of A$70.3-million for the six months ended December 31, during which the Nullagine joint venture (NJV) project in Western Australia also achieved record production of 3.14-million wet metric tonnes (wmt), of which BC’s share is 2.46-million wmt.
The after-tax profit compares with profit of A$7.7-million a year earlier and production of 2.28-million wmt in the six months ended December 31, 2012.
Owing to robust iron-ore prices and the Australian dollar declining relative to the US dollar, BC was able to generate a record half-year revenue of A$301-million. The company had also managed to generate a record operating cash flow during the period of A$146.7-million and achieved earnings before interest, tax, depreciation and amortisation of A$120.3-million.
“This half-year was a pleasing one for BC. We achieved record exports, which, combined with continued strength in the iron-ore price and an ongoing focus on cost control, translated into record revenues, operating cash flow and profits,” BC MD Morgan Ball said.
BC further stated that it finished the half-year in a strong balance sheet position, with cash of A$196.7-million, after repaying debt ahead of schedule down A$65.6-million, from A$103.3-million at June 30, 2013.
The company also declared a dividend of 17c a share fully franked, which equated to a 30% payout ratio on the net profit.
“We are proud of our dividend track record and delighted to reward shareholders with another attractive dividend, at a materially increased level compared to the previous interim dividend,” Ball said.
Meanwhile, other achievements by the NJV during the six-month period included surpassing the project’s export milestone of 10-million wmt, about 2.5 years after the first ore ship, and starting a trial to assess the viability of beneficiating lower grade ore through a simple dry crush and screen process.
Further, notwithstanding heavy rains in January and early February, BC expected the NJV to achieve sales of 5.8-million to 6.2-million wmt during the 2014 financial year at C1 cash operating costs of $46/wmt to $50/wmt.
The company further said that its C1 cash operating costs were expected to be in the range of $40/wmt to $44/wmt, reflecting the impact of the rail and port prepayment during the first part of the 2014 financial year.
In addition, capital expenditure of about $20-million was forecast in relation to BC’s share of the NJV’s capital expenditure and exploration costs in Brazil.
“The key focus for the remainder of the financial year is to achieve our targets through continued strong operational performance. We will also continue to assess growth through low grade beneficiation and new business development opportunities in a measured manner, whilst maintaining our emphasis on dividends and total shareholder return,” Ball said.