ASX RECORD. cash flows. The. the Company s. charge is. exploration flows from The base, Mr Brinsden said. * after tax.

Transcription

1 ASX Announcement 2013 Annual Results, 22 August 2013 RECORD EXPORTS AND REVENUE UNDERPIN STRONG OPERATING CASH FLOWS 3c dividend declared FY2013 KEY RESULTS Record exports of 7.4Mt Record revenue of $695M $142M in net operating cash flows $277M invested in new mine and infrastructure development and existing e minee expansion $14M underlying profit * after tax $245M statutory loss after tax due to previously announced asset impairmentss $417M cash in bank as at 30 June 2013 Mt Dove and Abydos mines developed, Utahh Yard 2 port expansion largely complete Mt Webber mine development underway Targeting exports of plus 10M tonnes in FY14 Atlas Iron Limited (ASX:AGO) is pleased to announce that record iron ore exports have underpinnedd strong net operating cash flow of $141.8M in thee year to 30 June result came from record revenue of $695. 1M reflecting increasing production, the strengtheningg iron ore price and the lower Australian dollar seen in the second half. Exports totalled 7.4Mt + for the year. Based on the strong cash flows being generated from operations, continuing growth in production and the Company s outlook for the iron ore price, Atlas has maintained itss dividend at 3c per share for the year (unchanged). profit* after tax was $13.7M, duringg a year impacted byy lower overall commodity prices (particularly in the first half) and a strong Australian dollar. Profit was impacted by higher noncash depreciation and amortisation charges totalling $98.8M, full consolidation of Shaw River Manganese e Ltd and exchange lossess on US denominated d debt. depreciation and amortisation charge is expected to drop significantly (on a per tonne basis) as production grows from the larger reserves and longerlife assets at Mt Webber. Atlas reported a statutory loss after tax of $245. 1M, arising mainly fromm the previously announced write down of asset values pertaining to undeveloped exploration project areas and noncore tenements. Atlas Managingg Director Ken Brinsden said the strong production growth and operating cash flows from the FY13 second half had continued into the firstt Quarter of Company s ability to continue paying a dividend while investing in i the development of new mines and infrastructure highlights the cashgenerating power of our growing Pilbara production base, Mr Brinsden said. * underlying basis is a nonifrs measure that in the opinion of the Company provides useful information to assess financial performance. see nonifrs measures are unaudited. + Exports comprised 5.9Mt (wet) of Standard Fines and a 1.5Mt (wet)) of Value Fines. *All figures quoted are in Australian dollars, unless stated otherwise. Atlas Iron Limited Raine Square, Level 18 PO Box 7071 P: E: 300 Murray Street Perth WA 6000 Cloisters Squaree Perth WA F: W:

2 Page Financial Performance Summary 2013FY 2012FYY Variance Iron Ore Shipments Mt (WMT) % Realised Price per Tonne US$ (DMT) % Revenue % Net Operating Cash Flow % Profit Before Tax * (0.5) % Profit After Tax * % Statutory Profit / (Loss) After Tax (245) (115) 114% Dividend per share (unfranked) $ * underlying basis is a nonifrs measure thatt in the opinion of the Atlas directors provides useful informatiion to assess the financial performance of the Company. se nonifrs measures are unaudited. Cash operating costs (C1) for FY13 were within guidance at $49.90/t, approximately 11% up on the previous year due to increased port handling charges, longer haulagee distance, increasing dewatering costs at Pardooo and increased production strip ratios at the Pardoo and Wodgina mines. Increasing economies of scale as production grows towards 12Mtpa and a further cost saving measuress to be deliveredd during FY14 are expected too contain C1 cost growth, notwithstanding the longer average transport distances expected during thee coming year. C1 cash cost guidance for FY14 is $49 $53/t. Substantial savings in corporate, exploration and project evaluation costs c have been achieved during the FY13 year and further savings will be sought in the coming year across these areas and C1 operating costs, without adversely impacting thee company s ability to deliver d on itss key growth projects. Annual Dividend Directors of Atlas are pleased record date of 6 September to declare an unfranked dividend of 3c per share and advise a Directors and management of Atlas remain focussed on creating shareholder value through timely and cost effective growth in iron ore production. Company s intention is to continue to pay dividends during this growth phase, providing that operating cashflows and future cashflow needs allow. FY14 Guidance Atlas is forecasting C1 cash operating costs of $49$53/t (FOB, WMT) during FY14, and shipments of Mt, comprising Mt of Standard Fines and Mt off Value Fines. Please refer to Atlas FY13 Annual Results presentation for further details pertaining to Atlas operating and capital guidance for FY14.

3 Page 3 Horizon I Growth Atlas has completed commissioning of the Abydos mine and mine productionn is now ramping up. Haulage will be commencing from the mine on 23 August Commissioning at Utah Point Yard 2 in Port Hedland is largely complete and noww ready to receive r ore. Atlas port shipping capacity now matches the ncreasing mine production. Mt Webber Stage 1 mine construction is underway and combined with thee Stage 2 project and Atlas additional exploration potential the Company is targeting upp to 15Mtpa from its Horizon I operating model. Feasibility work on the Mt WebberStage 2 expansion is advancing with encouraging results. Initial indications are the capital cost for Stage 2 based on a road haulage model is in the order of $60M (subject to completion of current feasibility f studies), with a cocommitment to road upgrades of approximately $9M, both of which are well beloww historical estimates. Mt Webber tonnes are quoted on a 100% basis and are subject to thee Altura JV sharing arrangements Horizon II Growth Options Atlas continues discussions with a range r of Pilbara infrastructure providers. Significant progress has been made over the period, with the key economic parameters for the provision of infrastructure services well understood by the Company. Negotiations are continuingg with the focus on service levels and long term agreements to match the tenuree of the infrastructure involved. Company remains confident in its ability to unlock the additional value within its substantial resources and reservess through logical and commercial rail and port infrastructure solutions. Company has commenced discussions withh a number of parties who w are interested in involvement in the Company s Horizon II development, via means such as project equity involvement or product prepays. Such arrangements could assist in funding Atlas Horizon II expansions, with identification of the preferred partner(s) a priority project for the coming financial year. Media Enquiries please contact: Paul Armstrong Read Corporate Investor Enquiries please contact: Ken Brinsden, Managing Director Mark Hancock, Executive Director Commercial

4 Page 4 ATTACHMENTT Commentary to the FY13 Results underlying* basis is a nonifrs measure that Atlas Iron uses to measure m operational performancee and provide a consistent basis of comparison of operational performance year on year. Atlas use of the underlying results takes into account the effect of oneoff income and a expensee items including: impairment losses, impact of business combinations and related expenditure, and oneoff tax impacts (i.e. initial recognition of MRRT). Reconciliation of underlying EBITDA to cash floww from operations is provided below: Millions 31Dec12 30Jun13 30Jun133 30Jun12 Half Year Half Year Full Year Full Year EBITDA* Working capital movements Inventory (15.1) (14.3) (29.4) (4.1) Debtors and other assets (7.2) Creditors and other liabilitiess (15.1) Interest received Share of JV and associates losses Other noncash items (1.9) (14.5)( Cash flow from operations (5.3) * underlying basis is a nonifrs measure that in the opinion of the Atlas directors provides useful information to assess the financial performance of the Company. se nonifrs measures are unaudited. Cash flow from operations during the 2 nd half of the 30 June 2013 year was considerably higher than that of the first half, reflecting higher iron ore shipments and relative improvements in the price of iron ore, coupled with the decline of the Australian dollar during the latter part of the financial year. It was also positively impacted by corporate, exploration and project cost savings s delivered during the half year.

5 Page 5 Reconciliation of underlying cash gross margin to underlying profit after tax and statutory profit / (loss) after tax, is provided below: millions cash grosss margin* Unwind of port prepayment included in operating costs Exploration and evaluation expense Other costs Share of loss of associates & JVs (net of impairment) EBITDA * Depreciation and amortisation EBIT* Net finance income/(expense) profit/(loss) before tax * tax benefit/(expense)* profit/ (loss) after tax * Impairment expense net of tax Net impact of business combinations Initial recognition of MRRT Statutory profit/ (loss) after tax 31Dec12 30Jun13 Half Year 70.0 (4.6) (14.1) (27.0) (3.3) 21.0 (41.5) (20.5) 5.4 (15.1) (258.2) 1.2 (256.0) Half Year (1.7) (12.4) (12.4) (5.6) 92.0 (57.3) 34.7 (20.1) 14.6 (1.9) 12.7 (1.8) Jun133 30Jun12 Full Year Full Year (6.3) (8.6) (26.5) (75.9)( (39.4) (45.2)( (8.9) (9.8) (98.8) (43.5)( (14.7) 20.3 (0.5) (25.6)( (260.0) (53.6)( 1.2 (17.4)( (115.8) (245. 1) (114.6) * underlying basis is a nonifrs measure thatt in the opinion of the Atlas directors provides useful informatiion to assess the financial performance of the Company. se nonifrs measures are unaudited. underlying cash grosss margin decreased byy 25.5% yearonyear to $194.1M despite an increase in tonnes sold, due to lower realised iron ore prices received during the 31 December 2012 half year and higher cash costs per tonne for the year. 30 June 2013 half year achieved an underlying cash gross margin broadly in line with the prior year. Expenditure on exploration and evaluation decreased by $49.4M from the priorr year due to reducedd expenditure on longer dated projects and a more mature explorationn portfolio, enhancing underlying EBITDA for the year. focus of the year ss exploration and evaluation wass McPhee Creek and Corunna Downs. re was a focus on reducing corporate and other costs across the business from various initiatives including; operational efficiency, contract negotiation, redundancy and redeployment of corporate, development and exploration personnel. reduction in underlying EBIT to $14.2M from $77.5M in the prior year was mainly due to a 127% increase in depreciation and amortisation costs to $98.8M.. This increase resulted from higher tonnes sold, the short mine life of Mt Dove, along with higher costss per tonne, due primarily to changes in closuree provisionss for Atlas North Pilbara mine portfolio and updated estimates of future stripping costs at Wodgina. profit after tax decreased from the prior year to $13.7M due to the factors noted above and higher financing costs, resulting from the debt financing completed during the year. statutory loss after tax for the year of $245. 1M was impacted by writedownsw s of $458.1M ($260.0M net of tax) in asset values of undeveloped Horizon I and II exploration project areas and noncore tenements and the consolidation of Shaw River Manganesee Limited from 29 August 2012.