dj mount gibson iron 1h profit triples despite

DJ Mount Gibson Iron 1H Profit Triples Despite Production Fall08/02/2011 02:46PM AEST
SYDNEY (Dow Jones)--Net profit at iron ore miner Mount Gibson Iron Ltd. (MGX.AU) more than tripled on year in its first half ended Dec. 31 despite a 15% fall in production, the company said.

Mount Gibson, Australia's fourth-largest locally listed iron ore miner by production, said first-half net profit climbed to A$140.0 million from A$39.4 million, helped by strong iron ore prices.

Production from its Tallering Peak and Koolan Island mines fell to 3.13 million tons from 3.68 million wet tons, but use of stockpiles meant sales fell to 3.24 million tons from 3.38 million tons, while sales revenue rose to A$382.1 million from A$242.3 million.

Earnings were helped by a A$14.1 million mark-to-market gain on foreign exchange derivatives in the period, against a A$500,000 loss the previous year.

Iron ore pricing changed dramatically last April, when major producers signaled a move from the traditional benchmark system, in which major iron ore contracts are priced annually against the first major producer-consumer deal of the year, to an index-based system closer to that of other commodities markets.

Managing Director Luke Tonkin said: "The strong half-year result reflected record iron ore sales revenue resulting from strong sales volumes from our operations and strengthening iron ore prices."

Iron ore contract prices quoted by The Steel Index rose to an all-time high Monday of US$184.75 a ton.