Atlas Iron has swung to a full-year profit as a rebound in iron ore prices helped the junior miner recover from a writedown-driven loss a year earlier.
The company reported net profit of $48 million for the year to June 30, up from a $159 million net loss last year, while revenue for the year rose 11 per cent to $871 million.
Net operating cash flow grew by $123 million as a result of higher sales pricing, an increased proportion of higher-margin iron ore lump product in the sales mix, and operational efficiencies, the company said.
Managing Director Cliff Lawrenson said the company achieved a sharp turnaround with a focus on tight cost discipline and a prudent level of hedging.
"Atlas, once again, has the capacity to generate strong cash flow and profit despite iron ore price volatility," he said.
Its average realised price increased to $61 per wet metric tonne from $55/wmt a year earlier, while full cash costs remained steady at $53/wmt.
Atlas, which staved off voluntary administration in 2016 after securing a debt-to-equity swap deal from creditors, reduced its secured debt facility from $182 million to $103 million over the year.
It held a cash balance of $81 million at the end of the year, plus another $20 million in a reserve account mandated by its lenders.
The Pilbara miner expects iron ore shipments to be nearly a third lower in FY18, at nine to 10 million tonnes.
Operating costs are likely to rise to between $54 to $58 per wet metric tonne on account of longer road haulage distances, higher shipping freight rates and reduced volumes.
Cash costs are also set to be slightly higher, as collaboration arrangements with key contractors end, although this will relieve Atlas from the obligation of paying margin and premium payments to contractors.
The company did not declare any final dividend.
Atlas shares closed 0.2 cents higher at two cents.
ATLAS IRON SWINGS TO FY PROFIT
* Net profit of $48m vs $159m loss
* Revenue of $871m, up 11pct
* No dividend
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