Hidden among Monday’s flood of last minute mostly losses were two results from middle level miners that sum up the past year.
Straits Resources had a good year, sold a key asset for a lot of money, but like so many other companies had to take a few hits financially to right size the accounts, and then contend with the fall in commodity prices and investor interest.
And CBH Resources took the axe to asset values in the wake of the slump and indicated that a big Japanese shareholder will not maintain its current holding (see next story).
Straits shares traded up 5% yesterday, or 11c at $2.30.
The market took the news of a loss in its stride, preferring to look at how the company sees the outlook, and of course, how the loss was created.
Basically Straits took a big profit of almost $260 million form selling its coal business, Straits Bulk and Industrial, then used that profit to clean up the accounts.
Straits Resources posted a net loss of $42.1 million after impairments for the year to June 30.
It didn’t provide a comparable figure because it switched from calendar year to financial year reporting in 2008.
Straits Resources reported a net loss of $6 million for the six months to June 30, 2008 after reporting a net loss of $2.3 million for the 2007 calendar year.
The latest result includes a $216.3 million profit from operating activities (mostly the profit from the sale of SBI), impairment charges totalling $178.3 million and write-downs at the group’s metal operations.
Straits though will still pay an unfranked final dividend of 30 cents per share. It did not pay an interim dividend.
This compares to an unfranked dividend of two cents per share for 2008.
Straits Resources chief executive Milan Jerkovic said in
Monday’s statement that the underlying result was primarily due to the sell down of the company’s interest in subsidiary Straits Bulk and Industrial Pty Ltd to Thailand’s PTT Group.
"Straits has never been in a stronger financial position than it is today," he said.
"This follows from the cash realised from the SBI transaction, as well as the additional cash which is to come following the recent announcement regarding the Sebuku boundary rezoning in Indonesia.
"In addition, Straits retains a substantial investment and exposure to highly profitable coal operations through our 40% investment in PTT Asia Pacific Mining (PTTAPM), formally known as SBI.
"We are taking this opportunity to re-focus Straits. We are undergoing a substantial cleaning-up exercise, and as part of that, we have made impairment charges and write-downs at the group’s metal operations.
"We are also now addressing a number of issues impacting our performance, including a program of divesting non-core operations.
"We believe that this will result in the group being positioned to achieve significant improvements in operating and financial performance going forward," the CEO said in the ASX statement.
"Our goal is to grow the company’s metal assets to match the size and profitability of the coal business we created."
The company was re-focusing on "a few core assets", including the sale of non-core operations.
Straits this month agreed to sell its Whim Creek copper mine, which is set to close in December, and associated assets in WA to Venturex Resources Ltd.
Mr Jerkovic said the company was "actively looking at acquisition opportunities".
He said the outlook was positive for Straits, which retained exposure to an expanding thermal coal business and "an immature but emerging base and precious metals business".
And the company could have more money coming.
The recently announced Indonesian government approval at Sebuku clears the way for Straits to claim the outstanding US$115 million performance payment from PTT.
