PERTH (miningweekly.com) - Iron-ore miner Mount Gibson Iron on Tuesday reported that net profit after tax for the interim period had declined to A$37.1-million, compared with the A$129.9-million reported in the previous corresponding period, as iron-ore prices fell.
Between July and early September, the benchmark iron-ore price fell around 35% to a three-year low of $89/t, before recovering at the end of December.
Mount Gibson said that reported earnings were also impacted by the early adoption of new accounting requirements governing the treatment of deferred waste stripping, which became compulsory for ASX-listed companies.
Despite the prevailing iron-ore prices, Mount Gibson reported that sales volumes for the six months to December had increased by 56% on the 2011 interim period, to a record 4.43-million tons, including Mount Gibson’s first sale of low-grade ore and mineralised waste.
CEO Jim Beyer told shareholders that the extreme price volatility experienced during the second half of 2012 underlined the importance of the company’s focus on business optimisation, operational agility, and cost reduction, in order to remain robust even in times of high volatility.
“This focus has already delivered greater operational predictability, and we are confident of achieving further improvements over the coming months.”
Mount Gibson was targeting the elimination or deferral of between A$120-million and A$150-million of capital and operating expenditure from its original 2012/13 budget.
Beyer noted that along with the company’s healthy balance sheet, the company focus was expected to allow Mount Gibson to better capture the benefits of the stronger iron-ore prices, which were experienced at the start of the calendar year.