Delays in obtaining approvals and takeover defence costs have blown out Midwest Corporation Ltd's net loss for the first half of 2008, up from the previous year's $1 million to $7.8 million.
This year's net loss was on the back of a significant decline in sales revenue from $18.6 million to $4.3 million. Earnings per share dropped to a loss of 0.04 cents per share, down from a loss of 18c in 2007.
The iron ore miner said its revenue was adversely impacted by congestion at the Geraldton port and the suspension of its Koolanooka operations, prompted by delays in obtaining approvals for mining.
"These delays also required Midwest to pay suspension rates to the company's haulage contractor whilst awaiting screening approvals," the company said in its report.
"Midwest continues to be affected by the suspension of haulage and shipping, but has recently recommenced operations at the remaining low grade stockpile."
Additionally, the company was hit hard by takeovers launched over the period from Murchison Metals Ltd and Sinosteel Corporation, with costs to legal firms and consultants to continue into this financial year.
Midwest is currently in the middle of a takeover by Sinosteel which is due to end on Monday.
Sinosteel currently holds a 70.2 per cent interest following the acceptance by Murchison which held a 9.2 per cent stake.
There has also been speculation today that Midwest shareholders and former director David Law has sold his 13.2 per cent stake to Sinosteel, leaving US investment fund Harbinger Capital as the only major shareholder to accept the takeover offer.
MMX Price at posting:
$1.95 Sentiment: LT Buy Disclosure: Held
