Steel and iron ore business Arrium has suffered a $694.7 million net loss for 2012/13, down from a $58 million profit one year earlier.
The result was impacted by restructuring charges.
Arrium’s underlying net profit of $168 million for the year to June 30 was down from $195 million, with the company saying lower iron ore prices had overridden the benefits of higher sales volumes.
Revenue was down 3.6 per cent to $6.09 billion.
Arrium’s iron ore mining business achieved a 32 per cent increase in sales but earnings were flat at $340 million.
The mining consumables division grew earnings before interest, tax, depreciation and amortisation (EBITDA) by 15 per cent to $197 million.
Arrium’s steel business lifted EBITDA by 15 per cent to $76 million but also incurred $961 million in impairment charges and restructuring costs.
The company said it would sell non-integrated steel businesses and properties as it moves to focus on cash generation in its steel operation, while growing the mining and consumables divisions.
Arrium managing director Andrew Roberts said the outlook for the mining division was solid, with the lower Australian dollar and continuing Chinese growth supporting iron ore demand.
Earnings for 2013/14 were expected to benefit from expanded production.
In mining consumables, Arrium said grinding media demand was forecast to grow at eight per cent a year over the next four years due to increased copper and gold production in North and South America.
Stay informed, daily
The company said steel demand was expected to remain flat in the first half of 2013/14 but domestic construction was expected to recover slowly during the year.
“Earnings in FY14 for Steel and Recycling are expected to benefit from further cost reductions and operational improvements, as well as from the impact of a sustained lower Australian dollar,” Arrium said in a statement.
Arrium paid an unfranked final dividend of three cents per share.
Shares in Arrium were up 5.5 cents, or 5.6 per cent, in early trade.
