Kambalda-based nickel mining company Mincor Resources NL has announced a 45% increase in net profit after tax to $29.3 million, generated by strong nickel production and stronger prices.
Kambalda-based nickel mining company Mincor Resources NL has announced a 45% increase in net profit after tax to $29.3 million, generated by strong nickel production and stronger prices.
Earnings were further boosted by the sale of Mincor's residual interest in Tethyan Copper Company Ltd.
The strong earnings performance enabled the Company to declare an increased final fully franked dividend of 3 cents per share - lifting its full-year payout to shareholders by 67% to 5 cents.
The bottom line result compares with a net profit after tax of $20.2 million last year, and translates into earnings per share of 15.1 cents, up from 10.4c in 2005.
Mincor managing director David Moore said the strong financial performance provided a sound platform for further growth, with Mincor debt-free and with a cash balance at 30 June 2006 of $45 million.
"This is a very pleasing result, and a tribute to the efforts of our team across the board," Mr Moore said. "Mincor is in a strong financial position and is well placed to fund its expanding pipeline of growth projects while continuing to pay good dividends."
The full announcement is pasted below
Nickel mining company Mincor Resources NL has delivered its fourth straight year of strong earnings growth, today announcing a 45% increase in net profit after tax to a record $29.3 million. The strong earnings performance enabled the Company to declare an increased final fully franked dividend of 3 cents per share - lifting its full-year payout to shareholders by 67% to 5 cents.
The results were generated from strong production of 13,500 tonnes of nickel metal in concentrate for the 2006 financial year (2005: 10,000 tonnes), with all four of the Company's Kambalda nickel mines operating at full capacity by year end. The Company benefited from strong nickel prices in the last quarter of the financial year, and earnings were further boosted by the sale of Mincor's residual interest in Tethyan Copper Company Ltd.
Mincor's result was struck on a 44% increase in sales revenue to $174.6 million (2005: $121.2 million), generating a record EBITDA (earnings before interest, tax, depreciation and amortization) of $70.6 million (2005: $46.7 million). EBITDA before significant items (the sale of the Tethyan Options and write-off of exploration properties in Tanzania) was up 35% to $63 million.
The bottom line result compares with a net profit after tax of $20.2 million last year, and translates into earnings per share of 15.1 cents (2005: 10.4 cents).
The Company has declared a final fully franked dividend payment of 3 cents per share, up from 2 cents last year. This will increase the full year payout to 5 cents per share - a 67% increase on the previous year. Mincor's dividends have risen 233% (from 1.5 cents per share) since 2004.
Mincor's Managing Director, David Moore, said the strong financial performance reflected the Company's disciplined investment in new mining projects over the past two years, and provided a sound platform for further growth, with Mincor debt-free and with a cash balance at 30 June 2006 of $45 million.
"This is a very pleasing result, and a tribute to the efforts of our team across the board," Mr Moore said. "Mincor is in a strong financial position and is well placed to fund its expanding pipeline of growth projects while continuing to pay good dividends."
Mincor spent $7.4 million on exploration during the year, discovering the South Miitel ore body and ending the financial year with an emerging discovery at Carnilya Hill. $3.5 million of exploration expenditure was written off against profits, while the remainder, being near-mine extensional work, was capitalized.
"We expect to announce a development decision at South Miitel in the very near term, and could see rapid movement on our emerging discovery at Carnilya Hill over the coming months," Mr Moore commented.
Mr Moore said that rising costs had been a feature of the past two years but that strong commodity prices had generally enabled margins to be maintained during the first three quarters of the 2005/6 year, and significantly enhanced since April when the nickel price commenced a strong upward trend.
"Nevertheless, Mincor remains vigilant on costs, and to this end we have made the decision to move our Redross Nickel Mine to owner mining," he said. "Our mining contractor Barminco has done a fantastic job there but we feel that the specific requirements of the mine are now more suited to an owner operation".
Mincor has committed $8 million to the transition to owner-mining at Redross, which will take place on 1 October 2006. The capital outlay, for trucks, boggers, airleg and other mining equipment, is expected to provide a strong financial return through lower operating costs and greater operational flexibility over the coming years.
