Western Areas back to black on $25m profit
Western Areas back to black on $25m profit

WA nickel miner Western Areas has returned to positive territory, reporting a $25.5 million profit on the back of the resurgent nickel price.

In its annual results out this morning, the nickel miner reported increased revenues to $320 million, reduced costs and an increase in production levels.

The company, which mines predominately at its Forrestania project east of Hyden, also announced a 5 cents a share dividend, up from 2 cents a share last year when it reported a $94.1 million loss.

The company exposure to fluctuations in the price of nickel was highlighted in the difference between its first and second half earnings.

Indonesia's export ban on unprocessed nickel came into effect in January, resulting in a surge in the nickel price.

"As a result of these changed market dynamics, the second half of the year saw the nickel price average $US7.50/lb, versus a first half average of $US6.32/lb," Western Areas managing director Dan Lougher said.

"Given Western Areas' strong leverage to the nickel price combined with being a consistent low cost producer, the company's profitability and cashflow were substantially improved."

Concurrent with the improvement in the nickel market, the Company has maintained its focus on strong operational outcomes, with unit cash costs materially reduced compared to FY13.

"This focus has provided the maximum benefit possible from the improved nickel price to accrue to Western Areas and hence passed on to our shareholders."

The company released forecasts for the current financial year, predicting production of 25,000 to 27,000 tonnes, cash costs of $2.70/lb to $2.80/lb and capital expenditure of $50 million to $60 million.

In early trade its shares were up 6 cents to $4.81.

The West Australian

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