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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Energy Resources Of Australia Limited | ASX:ERA | Australian Stock Exchange | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.001 | -2.94% | 0.033 | 0.032 | 0.036 | 0.036 | 0.033 | 0.035 | 1,318,041 | 07:10:15 |
Energy Resources of Australia Ltd. (ERA.AU) said Friday that its first half profit plunged 82% after the Rio Tinto Ltd. (RIO.AU) subsidiary and one of the world's biggest uranium producers encountered poor ore grades at the resumption of dry season mining in Australia's Northern Territory.
ERA also got less money for its uranium oxide as high global stockpiles and lower demand caused by a global economic slowdown kept prices subdued.
Net profit for the six months to June 30 fell to A$22.7 million, from A$127.6 million in the previous corresponding period, missing UBS and J.P. Morgan forecasts of A$28 million and A$39.6 million, respectively.
Revenue slid 37% to A$217.7 million from A$347.0 million.
ERA, which is 68%-owned by Rio Tinto, negotiates prices in long-term sales contracts that can be partially influenced by movements in the spot price.
Higher uranium stockpiles, particularly in Kazakhstan, and delays in the construction of some nuclear reactors in China are expected to keep uranium oxide, or yellow cake, prices suppressed in the short term, ERA said.
It stuck to its forecast of achieving an average realized uranium oxide price in 2010 broadly similar to what it got in 2009. In the 2010 first half, it realized a price of US$44.79 per pound, compared to US$48.02 in the 2009 first half.
A big fall in profits was already largely expected by the market after ERA on July 13 sharply downgraded its production guidance to 4,300-4,700 metric tons of uranium ore. It reiterated that guidance Friday.
ERA downgraded its output guidance after it at last gained access to the main ore body at its Ranger mine after seasonal rains dried up in recent weeks and stability problems with the south wall of the pit were dealt with.
The ore it encountered, however, was of a much lower grade than it expected. Chief Executive Rob Atkinson had said July 13, "we see good grades in front of us now and we're hoping to exploit that".
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com
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