January 29, 2010

Australia's Energy Resources Full-Year Profit Lifts 23% On Uranium Sales

Uranium miner Energy Resources of Australia Ltd (ERA) has posted a 23 per cent rise in annual profit on the back of higher revenue from sales of the mineral.

ERA, majority owned by Rio Tinto Ltd, said the outlook for the uranium market remained bright due to sustained government interest around the world in nuclear energy as a viable source of power.

It said production and sales in 2010 are likely to be broadly similar to previous years, albeit weighted to the second half.

Net profit for calendar 2009 was $272.6 million, up from $221.8 million in 2008, after sales of uranium oxide lifted revenue by 55 per cent to $767.8 million.

ERA says sales revenue rose mostly due to an increase in the average realised sales price.

It realised an average sales price of uranium oxide of $US50.84 per pound in the year, up from $US32.53 per pound in the previous year.

At the end of 2009, the average spot market price was $US44.50 per pound, up from $US52.50 in 2008.

Production in 2009 of 5,240 tonnes, which was in line with production from previous years 5,339 tonnes.

"The 2009 annual production was achieved due to consistently strong performance in the processing plant through the year," it said in a statement on Friday.

During the year, ERA achieved the milestone of 100,000 tonnes of uranium oxide sold from the Ranger mine in the Northern Territory.

"While production, sales and average realised sales price in 2010 are expected to remain broadly similar to recent years, production and sales will be significantly weighted towards the second half as an effect of mine sequencing, lower grades and scheduled maintenance in the processing plant in the first half," it said.

However, ERA also said higher spending on scheduled maintenance costs and expenditure on development projects "will adversely impact earnings over the year."

ERA declared a final dividend of 25 cents per share, up from 20 cents in 2008.

The total dividends payable to shareholders for the 2009 year was 39 cents per share, up from 28 cents in 2008.

By 1240 AEDT, ERA shares had slipped 0.43 per cent to $20.79, against a 1.85 per cent drop on the benchmark index.

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