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Atlas Iron narrows its annual loss

AAP logoAAP 30/08/2016 Prashant Mehra

Lower writedowns have helped Atlas Iron narrow its full year loss to $159 million, as the junior miner looks to stay afloat amid weaker iron ore prices.

The company took asset writedowns of $101 million, and depreciation and amortisation expenses of another $85 million, for the year to June 30.

Atlas Iron made a net loss of $1.38 billion in the previous year, caused by nearly $1.01 billion in impairment charges and asset value writedowns.

Revenue in 2015/16 rose nine per cent to $786 million, while underlying earnings, excluding the impact of impairments, rose to a $74 million profit from a $51 million loss a year earlier.

Shares in the company gained 0.1 cents to 1.1 cents.

Atlas staved off voluntary administration earlier in 2016, after securing relief from its debt woes in April through a debt-to-equity swap deal. It replaced its chairman in June with turnaround specialist Eugene Davis.

The Pilbara miner has been given some breathing space by a small rebound in iron ore prices. Iron ore currently trades at $US59 a tonne, up from a decade low of $US38 a tonne in late 2015.

Earlier this week, mining transport group McAleese went into voluntary administration after failing to secure a debt lifeline. McAleese, which was the key contractor for hauling Atlas' iron ore by truck from its Pilbara mines to Port Hedland, had been in strife since April when the miner sharply cut its operations.

On Wednesday, Atlas said it expects a gradual improvement in performance.

It has maintained its iron ore production guidance for 2016/17 at 14 to 15 million tonnes, and expects cash production costs for the year to be in the range of $34 to $36 a tonne, compared to $34.39 per wet metric tonne in 2015/16, and $45.74 wmt in 2014/15.

Atlas said it had a cash balance of $80.9 million at the end of June. Under the revised terms of its debt restructure, the miner is required to maintain a minimum of $35 million at the end of each month.

ATLAS IRON NARROWS ITS LOSS

* Net loss $159m vs $1.38b loss

* Revenue up 9pct to $786m

* No dividend

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