UPDATE: Energy Resources Of Australia Fiscal Year Net Profit Up 23%
January 28 2010 - 7:17PM
Dow Jones News
Energy Resources of Australia Ltd. (ERA.AU) on Friday met
analysts' forecasts with a 23% rise in annual profit boosted by
higher uranium contract prices, but it foreshadowed higher costs in
2010 as it works to expand its Ranger mine.
ERA forecast 2010 production, sales and average realized sale
prices to be "broadly similar" to those of 2009 but said the Ranger
expansion plus higher maintenance costs are expected to "adversely
impact earnings over the year".
The forecast of flat output and revenue but higher costs
suggests that ERA is expecting its annual profit to fall this year,
which is in line with analysts' expectations.
The Darwin-based uranium miner, 68%-owned by Rio Tinto Ltd.
(RIO.AU), booked a net profit for the year to Dec. 31 of A$272.6
million, rising from A$221.8 million in 2008. The average forecast
of five analysts polled by Dow Jones Newswires was for a 2009
profit of A$270.9 million.
ERA owns the Ranger mine in Australia's Northern Territory,
which in 2008 was the second largest producing uranium mine in the
world, according to the World Nuclear Association.
In a move to extend its life, ERA is studying what it calls the
Ranger 3 Deeps mineral resource. It expects the studies to be
complete around the middle of 2010 before making a decision on how
it plans to develop the resource.
ERA reiterated Friday that it expects to submit a draft
Environmental Impact Statement for its proposed heap leach facility
some time in 2010. Heap leaching uses acid filtration to extract
minerals from ore.
The company declared a final dividend of 25 cents per share, up
from 20 cents in 2008.
Earlier this month, ERA said annual 2009 production fell 2% on
year to 5,240 tons but sales rose 4% to 5,497 tons as the company
drew on stockpiled ore.
Revenue totaled A$780.6 million in 2009, up 13% from A$691.8
million in 2008.
Over the longer term, ERA said its prospects remain strong. "The
outlook for uranium mining remains bright, with a strong market and
sustained government and public interest around the world in
nuclear energy as a critical part of the mix in a
carbon-constrained economy," it said.
The average spot price of uranium oxide in 2009 was US$44.50 per
pound, down from US$52.50 per pound in 2008.
ERA, however, got an average 2009 uranium oxide price of
US$50.84 per pound, up from US$32.53 per pound as old contracts
struck at lower prices rolled out of its sales portfolio.
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692;
ross.kelly@dowjones.com
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