UPDATE: Energy Resources 1st Half Net Profit Triples To A$127.6 Million
31 July 2009 - 1:41PM
Dow Jones News
Uranium miner Energy Resources of Australia Ltd. (ERA.AU) said
Friday first half net profit more than tripled to A$127.6 million
from A$38.9 million last year.
The profit is in line with guidance given by the miner earlier
this month, but still represents a strong performance driven by
higher output and rising prices.
The Rio Tinto Ltd. (RTP) subsidiary said its sales for the first
half to June 30 rose to 2,280 metric tons of uranium from 1,746
tons last year and production for the half rose to 2,695 tons from
2,357 tons in the previous corresponding period.
The prices ERA is receiving for its uranium continue to rise as
old legacy contracts, struck when prices were lower, roll out of
its sales portfolio.
The average realized sales price for the half climbed to
US$48.02 a pound from US$35.69 in the previous corresponding
period.
However, the miner signaled that further price rises are not
expected in the short term with the average realized price in the
second half tipped to remain at similar levels to the first half,
subject to the timing of sales deliveries.
And the company also warned that, with its contracts denominated
in U.S. dollars, fluctuations in the exchange rates would continue
to impact sales revenue in the second half.
ERA said full year production is expected to be in line with
levels achieved in recent years, while sales tons in 2009 are
expected to be slightly higher than in 2008 as sales volumes rise
in the second half.
Capital expenditure in the half was A$18.5 million, down from
A$92.5 million a year ago when the miner was investing in a number
of projects.
ERA is continuing to work toward a decision on the construction
of a decline for its Ranger 3 Deeps project in early 2010 and the
miner said preliminary work is also continuing on its planned heap
leach facility.
"Current projections remain that ERA has sufficient cash on hand
to take these studies and projects at least to bankable feasibility
level without the need for further funding," ERA said.
Revenue for the half more than doubled to A$336.1 million from
A$143.5 million last year and the miner posted an interim dividend
of 14 cents, up from 8 cents last year.
-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094;
alex.wilson@dowjones.com
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