Perilya profit slide
Monday, 30th August, 2010
Falling metal prices have contributed to a 35 per cent drop in Perilya's half yearly results.
The majority-owned Chinese silver, lead and zinc miner's interim report from December 30 to June 30 showed a slide in the zinc and lead prices, in Australian dollars, of 29 and 26 per cent respectively.
The company said on Friday that it considered the $18.5 million profit results good.
It said they contrasted with a challenging six months with zinc prices slumping from highs at the end of 2009 of almost $2900 per tonne to lows of around $1950/T, while lead dropped from highs of almost $2700/T to a low of just over $1900/T in early June.
"Despite a relatively strong start to the period in terms of metal prices and market optimism, it has ultimately been a difficult period for base metals producers, with significant falls in both zinc and lead prices," managing director Paul Arndt said.
"Given this environment, Perilya has produced an outstanding (result) in posting an after tax profit of $18.5 million for the six month period."
Perilya said the result was further demonstration of the strength of the Broken Hill operations and a further endorsement of the decisions taken in late to 2008 to restructure the operations to focus on a lower production and cost profile.
"The strong performance in a time of relatively weak metal prices underpins our confidence in our Broken Hill operations and allows us to turn our focus to growth opportunities for the company," Mr Arndt said.
"We have seen over a sustained period of 18 months the benefits of increased productivity and a repositioning of our cost base is significantly lower down on the industry cost curve as (a) result of our restructure in late 2008."
At Broken Hill the results showed that for the reporting period the company mined more ore than the previous six months but that ore grades were lower with zinc at 4.6 per cent, lead at 3.8 per cent and silver at 38.5 grams per tonne.
Production was 33,1000 tonnes of contained zinc and 26,900 tonnes of contained lead.