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HONG KONG, Aug 24, 2011 - (ACN Newswire) - APAC Resources Limited ("APAC"), a natural resources investment and commodity business company listed on the Hong Kong Stock Exchange (1104) with subsidiaries in Hong Kong and Shanghai, announced today, its financial results for the eighteen months ended 30 June 2011.
Corporate Highlights
-- By way of a placement of 1,100,000,000 shares in April 2010, APAC successfully raised gross proceeds of HK$550 million to provide additional working capital.
-- Mount Gibson, one of APAC's primary strategic investments, announced maiden dividend of A$0.04 per share.
-- As at 31 July 2011, APAC's net asset value per share was HK$0.97 based on market value of its listed investment.
Despite the commodities market downturn in 2011, APAC delivered solid performance for the eighteen month period ended 30 June 2011 with net profit of HK$1,462,069,000, mainly driven by the attributable profits from Primary Strategic Investment at HK$866,247,000. The profit from Resource Investment was HK$150,399,000. Commodity Business profit was at HK$138,011,000.
Mr. Andrew Ferguson, Chief Executive Officer and Executive Director of APAC, said "Given the volatility of the resources sector in the first half of 2011, we are pleased to report stronger than expected results, driven by the surge of attributable profits from our Primary Strategic Investments. The maiden dividend of A$0.04 per share to be distributed by Mount Gibson will contribute nearly HK$90,000,000 in cash, further strengthening our financial position."
2010 Period vs. 2009 Period
With improved profitability in all business segments, our net profit attributable to owners was at HK$1,104,447,000 (2009: HK$372,603,000), translating to a 196% increase. Attributable profits from our Primary Strategic Investments of HK$536,379,000 (2009: HK$118,028,000) represents a 354% increase. Resource Investment portfolio posted a net gain of HK$350,025,000 (2009: HK$124,702,000), representing an increase of 181%. Commodity Business achieved a net profit of HK$125,772,000 (2009: HK$46,092,000), representing an increase of 173%.
2011 1H Period vs. 2010 1H
2011 1H net profit after tax was HK$357,622,000 (2010 1H: HK$143,382,000) mainly driven by the attributable profits from our Primary Strategic Investments of HK$333,403,000 (2010: HK$172,407,000), up 93% from 2010 1H. However, this was offset by the underperformance in Resource Investment of HK$199,626,000 loss (2010 1H: loss of HK$106,334,000), up 88% from 2010 1H. Commodity Business profit was HK$12,239,000 (2010 1H: HK$75,837,000).
Primary Strategic Investment
APAC's two Primary Strategic Investments are Mount Gibson Iron Limited ("Mount Gibson") and Metals X Limited ("Metals X"), both located in Australia.
Mount Gibson, the fifth largest iron ore producer in Australia, produces iron ore from Koolan Island and the Tallering Peak mines in Western Australia. Its current production capacity is 7 million tonnes per year, and is to increase to 10 million tonnes in 2011 when the new Extension Hill mine starts production.
Metals X is an Australian-based emerging diversified resource group with a primary focus on tin via its 50% interest in the producing Renison mine in Tasmania, and nickel via its world scale Wingellina development. Metals X also has a portfolio of strategic investments, giving it significant exposure to copper, gold, nickel, zinc and bauxite.
Resource Investment
Our Resource Investment portfolio is dominated by a 14.79% interest in Kalahari Minerals Plc ("Kalahari") which represents nearly three quarters of the portfolio. The value of this position was impacted by negative sentiment surrounding the uranium sector following the tragic events at Fukushima in March. The remaining investments comprise mostly minor holdings in various emerging natural resource companies listed on major stock exchanges in different countries.
Commodity Business
Due to weather issues and implementation of the new long-term purchase agreements with Mount Gibson, sales and profit of this segment has been affected in the first half of 2011.
Prospects
APAC believes that its primary strategic investments are well positioned under the uncertain investment climate, as both Mount Gibson and Metals X are in production with strong net cash balances, while Kalahari controls a premium uranium asset. For the resource investment segment, the Group intends to be selective in adding positions and focus on commodities which are in short supply within China such as iron ore, uranium and copper. Remaining positive about the commodity market given the ongoing imbalances between supply and demand, the Group is continuing the negotiation with Mount Gibson regarding an iron ore off-take agreement of its new Extension Hill mine and expect to receive a greater share of the Koolan Island off-take after Mount Gibson cancelled its agreements with other companies. The Group looks forward to continuing to evaluate emerging opportunities and is confident in the natural resources markets for the forseeable future.
Contact:
APAC Resources Limited
Frederick Wong, Chief Financial Officer
Frances Tse, Investor Relations/Marketing Manager
Tel: +852 2541 0338
Email: info@apacresources.com
Strategic Financial Relations Limited
Iris Lee
Tel: (852) 2864 4829
Email: iris.lee@sprg.com.hk
Sherman Yu
Tel: (852) 2114 4956
Email: sherman.yu@sprg.com.hk
Shirly Chan
Tel: (852) 2864 4883
Email: shirly.chan@sprg.com.hk
Kelly Tam
Tel: (852) 2114 4987
Email: kelly.tam@sprg.com.hk
Topic: Press release summary
Source: APAC Resources
Sectors: Daily Finance, Daily News
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From the Asia Corporate News Network
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