Atlas posts $1.1b first-half loss
Atlas Iron is scrambling to reduce operating costs after posting a bottom line first-half loss of $1.1 billion on the back of a tumbling iron ore price.
Highlighting its problems, the company lifted total iron ore shipments by 35 per cent over the period to 6.9 million tonnes but its sales revenue fell 23 per cent to $451 million.
The company posted an underlying loss of $139 million for the six months ending December 31.
Its bottom line loss was hit by a previously-flagged, non-cash, asset impairment of $834 million, reflecting lower book value of its assets in a lower iron ore price environment.
The company will not pay an interim dividend.
Atlas said it had continued to cut costs in the first-half to deal with challenging market conditions and would cut costs further in the second half.
"All-in cash costs are now forecast to be $60-$63 per wet metric tonne, cost and freight in the six months to June 30, compared with $67.29 in the first half of the financial year," the company said.
"Atlas aims to be at the lower end of this revised range by June 2015."
C1 cash costs in the six months to June 30 are expected to be in a range of $42-$45 per wet metric tonne, free-on-board compared with $46.94 in the first half of the financial year.
Atlas managing director Ken Brinsden said the organisation had demonstrated strong capability to realise a positive cash flow from operations, despite extremely challenging market conditions during the first half.
"While the price of iron ore has fallen considerably, Atlas demonstrated a track record of consistently reducing costs during the half," he said.
"Following updated guidance released today forecasting significantly lower costs during the second half, Atlas is well placed to benefit from an improvement in the Australian dollar price of iron ore."
Atlas said it was close to breakeven for the half, despite the challenging market conditions.
Mr Brinsden said the company's results provided evidence of hard work, discipline and focus which had transformed the business, reduced its cost base, improved production and maintained safety, while remaining cashflow positive after proactive management of inventory.
