Atlas Iron’s full year earnings drop 6.7% on writedown, increased costs

Atlas Iron’s core earnings for 2013 fell 6.7% year-on-year on the writedown of two of its Pilbara exploration projects and higher operating costs, it said on Thursday August 22.

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The Australian iron ore junior posted underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) of A$113 million ($102 million) for the financial year ended June 30, compared with A$121 million ($109 million) a year earlier.

The company also posted full-year statutory loss after tax of A$245 million ($221 million), further into the red from a statutory loss of A$115 million ($103 million) recorded in the 2012 financial year.

The loss was mainly due to the A$258 million ($232 million) impairment charge announced in February this year, following a review of its Horizon 1 and Horizon 2 exploration projects in North Pilbara.

Iron ore exports totalled 7.4 million tonnes for the year, and Atlas expects shipments of between 9.8 and 10.3 million tonnes for the 2014 financial year.

The company’s cash operating costs (C1) for the year amounted to A$49.9 ($45) per tonne, up 11% from a year ago due to “increased port handling charges, longer haulage distance, increasing dewatering costs at Pardoo and increased production strip ratios at the Pardoo and Wodgina mines”, according to the statement.

The company has completed commissioning of the Abydos mine with production ramping up, it said. Haulage will start from the mine on Friday August 23.

Last month, Atlas announced that it expects first production from its 3-million tpy Mt Webber mine by the end of the year.

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