Thursday, 26 July, 2007

News Limited

THE net profit of uranium miner Energy Resources of Australia has plummeted to just $5.67 million for the first half of 2007.
The result is 71.46 per cent below the $19.86 million net profit reported in the corresponding half of 2006.

The uranium miner's shares dipped 25 cents to $19.01 by 12.19pm AEST.

ERA's first half performance was affected by heavy rain over the Ranger mine in late February and early March, which flooded the open pit and temporarily halted milling operations.

The company previously warned production and sales deliveries for the balance of 2007 and 2008 would be affected as a result of water levels in the open pit.

”ERA has undertaken a number of strategies to increase the rate of water removal from the operational pit,'' it said.

Sales for the first half totalled 2200 tonnes, compared to 3198 tonnes in 2006.

Revenue dipped to $114.3 million, from $154.7 million, due to a stronger Australian dollar.

ERA gained little exposure to the buoyant uranium spot price due to its long-term contracts, which were entered into before the price started to climb.

The company said the average realised price for the period was $US16.90 per pound ($19.14 per pound), compared to the average market price in June of $US95.00 per pound ($107.61 per pound).

ERA expects production to be in excess of 5200 tonnes in 2007 and 5000 tonnes in 2008.

“Sales volumes in the second half of the year are expected to be higher than in the first half as commitments deferred from the first half are met in the last quarter of 2007,'' ERA said.

The company has decided not to declare an interim dividend after the reduced profit performance.

ERA's Ranger mine is located about 250 kilometres from Darwin in the Northern Territory.