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17th March 2009, 10:00 WST

Iron ore producer Territory Resources has posted a $33 million first half net loss after $38 million in costs associated with investments and currency exchange.

The $33.341 million net loss in the six months to December 31, 2008 compares to a $2.037 million net profit in the previous corresponding period.

Included in the latest result are foreign exchange losses of $13.4 million and a $15.1 million impairment associated with Territory’s foreign exchange hedge book, caused by the sharp fall in the Australian dollar.

Territory said it was continuing discussions with its financiers on the implementation of new long-term debt arrangements to replace its existing hedge and loan facilities, with a resolution expected in the near-term.

Territory also incurred an $8.7 million impairment on its investment in Matilda Minerals, Matrix Metals and Northern Mining.

The company has iron ore operations and projects in the Northern Territory, the largest at Frances Creek.

Chairman Andrew Simpson said Territory had not experienced any interruptions to its shipping schedule at Francis Creek despite the “extremely challenging prevailing global conditions”.

“We are clearly seeing a continuation of this very uncertain and volatile global market environment into 2009,” Mr Simpson said.

While the impact of the global downturn on China’s economic growth remains uncertain, there have been signs of some recovery in China's iron ore market in the first few months of 2009, he said.

“Territory is in many respects ideally placed to benefit from this recovery,” Mr Simpson said.

Territory management will travel to China this week to meet with key customers and finalise long-term sales commitments, he added.

Revenue from operations in the first half was $65.9 million, up from $29 million in the previous corresponding period.

Territory shares were up half a cent, or 4 per cent, to 13 cents at 9.45am.

AAP