Bumper results for nickel miner puts a smile on investor dials
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Western Areas shareholders are smiling today after the nickel miner announced a 2c per share final dividend on the back of a strong return to profitability.
The Perth company (ASX:WSA) reported full-year net profit after tax of $19.3 million and sales revenue of $213.9 million, up from $209.1 million in the previous corresponding period.
The result was due to increase in nickel price to $6.11 per pound from $5.69/lb a year earlier.
Cash soared 85 per cent from the previous year to $140.3 million on the back of $64.6 million in cash flow.
Sale of assets including Blujay Mining — which netted $32.1 million after costs — helped the cash result.
On the operations side, mine production was 25,996 tonnes nickel in ore, down slightly from 27,607t in the previous year, at a cash cost of A$2.38/lb.
Sales volume was also slightly down on previous year to 22,639t. Capital expenditure and exploration spend reduced by $15.8 million to $34 million.
“Western Areas set out in FY17 to maintain a strong financial position and give priority to maximising cash generation,” said managing director Dan Lougher.
“We achieved this through measures such as the planned deferral of certain capital expenditure in the first half of the year and the implementation of various efficiency projects driven by our operations team.
“I am pleased that the Western Areas team has reliably delivered on all these promises, and accordingly, we have now achieved seven consecutive years of delivery to guidance or better.”
Looking ahead, the company has flagged a range of 21,500 22,500 tonnes of nickel in concentrate production at cash cost of $2.40 – $2.65/lb nickel in concentrate for FY2018
Shares in Western Areas hit an intraday high of $2.65, up 6 per cent, but has since cooled to $2.58 at 12:40pm AEST.