The West

BC Iron tips strong second half

UPDATE 1.45pm: BC Iron is tipping a stronger second half after posting a 42 per cent surge in first-half profit to $7.74 million.

Net underlying profit, which excluded one-off costs and impairment charges, was up 143 per cent to $13.27 million for the half.

The result came on revenue of $103.8 million, up 64 per cent on the previous corresponding period.

BC will pay a fully franked interim dividend of five cents a share.

BC Iron managing director Mike Young described the results as "a bit soft" but said they reflected the lowest iron prices since 2009 and a bear market.

"The lower than expected iron ore price during the period had a detrimental impact on the bottom line for the half, but we also crushed and therefore exported less tonnes than planned following the crusher upgrade and commissioning in this period," he said.

However he said the company was now achieving excellent throughput with a rate of 6mtpa expected to be achieved in the June quarter.

The company is expecting a much stronger second half on the back of higher iron ore prices and an 80 per cent jump in attributable iron ore exports from the purchase of an extra 25 per cent stake in its Nullagine iron ore joint venture project.

BC will lift its iron ore export from 2.5mtpa to 4.5mtpa after boosting its stake in Nullagine to 75 per cent in a $190 million deal with joint venture partner Fortescue Metals Group announced in December.

"As a result of the strengthening iron ore prices during the second half of 2013, the associated positive outlook and the improvements in the crushing numbers, we expect a stronger second half result, subject to the impact of the wet season," Mr Young said.

BC Iron said it expected it Nullagine joint venture to produce about 5mt of direct shipping ore for the full year with cash operating costs of $45-$50 a tonne.

The company held $58.3 million in cash and deposits at the end of December.

BC shares fell 15 cents, or 3.75 per cent, to close at $3.85 in a broadly firmer market.

The West Australian

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