Profit improvement for Mineral Resources Limited.Thursday, 19...

Profit improvement for Mineral Resources Limited.

Thursday, 19 August 2010 - MINING NEWS --

RECORDING nearly a 120% improvement in net profit after tax for 2009-2010 of $A97.2 million has placed contract crushing company Mineral Resources in good stead to pursue its growth strategy in the steelmaking commodities sector.

This compares to the 2008-09 result of $44.3 million.

Earnings before interest, tax and amortisation reached $103.7 million for the year, compared to $74.4 million in 2008-09.

A fully franked dividend of 13.6c was also declared, bringing the full-year dividend to 20c per share and representing an increase in total dividends paid to shareholders of 34.8% compared to the previous 12-month period when 19.35c was paid out.

In addition to increasing the underlying mining services base from the expansion of existing contracts and the acquisition of new work, the company has increased its export volumes of both iron ore and manganese and entered into agreements, and is progressing opportunities, for the development of increased production of commodities such as iron ore, manganese and lithium.

This has come about mainly due to its acquisition of Polaris Metals and current move on Mesa Minerals, as well as its strategic partner Hancock Prospecting.

The company currently owns nearly 63% of Mesa.

Exports of iron ore for the year reached 875,000 tonnes compared to 375,000t in 2009, while manganese shipments totalled 428,000t versus 275,000t in 2008-09.

Revenue for the year increased to $322 million, a 24% improvement on last year, and cash in the bank stood at $174 million.

Gina Rineharts Hancock Prospecting snapped up a 3% stake in Mineral Resources earlier this month after exercising 5 million options in the mining services and processing company.

In 2008, the two companies announced they would jointly develop the Hancock-owned Nicholas Downs manganese operation in Western Australias Pilbara, which has since begun early-stage commissioning and ramp-up.

As part of this agreement, Hancock was issued with 15 million options in Mineral Resources at an exercise price of $6.05.

Hancock still holds 10 million options after exercising the first tranche.

Shares in Mineral Resources closed the day down 1.12% at $8.83.