MinRes forced to defend disclosure standards
The mining giant has been hit with a long list of ASX questions over its half year results as the company continues to deal with scandals surrounding founder Chris Ellison.
Mineral Resources has again been forced to defend its disclosure standards after being hit with a long list of questions from the ASX related to its half year results.
The ASX grilled the embattled company about whether the market had been kept properly informed ahead of the results last Tuesday.
MinRes posted a massive first half loss to compound the company’s woes as it deals with the fallout from tax evasion and other scandals involving managing director Chris Ellison.
The company’s net loss of $807m compared to net profit after tax of $530m for the same period last year.
MinRes also made the stunning disclosure it would need to resurface with asphalt the 150 kilometre-long haul road essential to its iron ore operations and carry out other repairs at a cost of more than $200m.
The ASX quizzed MinRes about the 9 per cent fall in first half revenue, the 55 plunge in EBITDA and the 200 per cent decline in underlying NPAT. The result included a $352m post-tax impairment on the mothballed Ball Hill lithium mine and a $232m foreign exchange hit.
In its response, MinRes said it did not think half-year year metrics listed above included information that a reasonable person would expect to have a material effect on the company’s share price.
MinRes said that as a commodities business its earnings were impacted by a range of factors outside its control, such as fluctuating pricing and foreign exchange rates.
“Accordingly, MinRes does not provide earnings guidance to the market, and instead provides information to the market in relation to relevant factors impacting on the business and expected financial results,” it said.
The MinRes share price plunged nearly 7 per cent to $30.50 in trading last Tuesday before the release of the results well after market close.
The share price continued to spiral downward when the market reopened last Wednesday, closing at a four-and-a-half-year low of $24.15.
MinRes told the ASX its results were in line with consensus sell-side analyst estimates.
It said the board considered the numbers on revenue, earnings and net loss numbers on January 28.
The company said the market had been prepared for the impairment by announcements around the mothballing of Bald Hill and the impact of currency movements on its US dollar denominated bond notes.
“MinRes management tracked its expected first half earnings and consensus (via the Visible Alpha platform) both during and following the end of the reporting period,” it told the ASX.
MinRes said that it never formed a view the results would lead to “a market sensitive earnings surprise”.
Perth-headquartered MinRes said the market reaction was linked to it haul road problems and its balance sheet blues.
MinRes market capitalisation of $6.69bn has fallen below its net debt.
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