BC Iron says profit up 41pc, final dividend 30c per share by:...

BC Iron says profit up 41pc, final dividend 30c per share

by: SARAH-JANE TASKER
From: The Australian
August 28, 2013 11:47AM

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BC Iron has surprised investors on the upside with a healthy dividend payment and jump in profit amid a challenging environment in the iron ore sector.

The junior Pilbara miner today reported a 41 per cent increase in annual underlying profit after tax of $71.4m and record production of six million tonnes per annum. Net profit after tax fell from $50.6m the previous year to $48.8m.

“By any measure, the 2013 financial year has been an outstanding one for BC Iron,'' managing director Morgan Ball said.

“Against the backdrop of a challenging commodity price environment for the industry, BC Iron has achieved record production and financial results which has pleasingly been reflected in a very strong comparative total shareholder return.''

The company said the total amount of the final dividend is approximately $37m, which represents a fully franked final dividend of 30c per share. Combined with the interim dividend of 5c per share paid in March 2013, BC Iron says it equates to a dividend payout ratio of 60 per cent on underlying net profit after tax for the 2013 financial year.

BC operates the Nullagine project, which is a joint venture with Fortescue Metals Group. The original agreement, designed to provide BC Iron with access to Fortescue's infrastructure was originally a 50:50 partnership but the junior company purchased half of Fortescue's share to take its interest to 75 per cent.

“The execution of the Fortescue transaction demonstrated our ability to strategically grow the company on accretive terms,'' Mr Ball said.

The increased stake in the joint venture helped drive a 59 per cent lift in BC Iron's revenue.