The West

Iron ore loading at Koolanooka. Picture: Danella Bevis/The West Australian.
Iron ore loading at Koolanooka. Picture: Danella Bevis/The West Australian.

Mount Gibson's first half profit slumped 71.4 per cent to $37.1 million reflecting the lower prices it received for its iron ore.

The result was achieved on revenue of $416.2 million, up 10.4 per cent on the previous corresponding period.

The company declared an interim dividend of two cents a share fully franked to be paid on April 15.

"While sales volumes were at record levels, reported net earnings were significantly lower than in the prior corresponding period reflecting the substantial deterioration in iron ore prices and volatile market conditions during the September quarter of 2012," the company said in a statement.

However Mount Gibson said it was highly leveraged to increased iron ore prices, which would deliver stronger financial results if current prices prevailed for the remainder of the financial year.

Chief executive Jim Beyer said the interim net profit of $37.1 million reflected the challenging and volatile conditions experienced during the half.

"The extreme price volatility experienced during the second half of 2012 underlines the importance of our focus on business optimisation, operational agility and cost reduction, in order that our business can remain robust even in times of high volatility," he said.

"This focus has already delivered greater operational predictability, and we are confident of achieving further improvements over the coming months."

The company held $279 million in cash and term deposits at the end of the period and no corporate debt.

Mt Gibson shares were off 4.5 cents, or 5.03 per cent, to 85 cents at 9.20am.

The West Australian

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