The underlying net loss after tax was $A16.6 million, while the reported loss was $29.8 million due to impairments in the first half and lower nickel prices.

Revenue was $209.1 million, with low prices equating to an $88.1 million reduction, though cost of sales dropped by $21.7 million.

Earnings before interest, tax, depreciation and amortisation was $40.2 million.

The company did not declare a dividend.

Western Areas managing director Dan Lougher said the company had not been immune to the tough conditions seen in the global nickel sector.

“But I think we’ve more than met the challenges that the lower nickel price has presented us,” he told investors on a teleconference this morning.

He said the company’s operational performance had been pleasing with production of 25,009 tonnes of nickel at unit costs of $2.26 per pound of nickel.

Guidance for FY17 is 20,200-22,000t nickel in concentrate at unit costs of $2.40-2.75/lb.

Western Areas finance director David Southam said the company would keep costs under control.

“We have an internal goal to always have a “two” in front of [unit costs],” he said.

“A 50c increase in the nickel price doesn’t change our focus on cost.”

Sustaining capital has been reduced to $22-24 million – the lowest since the Forrestania operation began.

Exploration expenditure has been slashed to just $8 million, the lowest ever for the company.

Lougher said Cosmos would be the focus, while the company will spend “real dollars” on the Western Gawler project, a long-term prospect.

“We’re mindful of where we put the dollars to get the best returns,” he said.

“We’re giving Forrestania a rest this year.”

Western Areas closed the financial year with no debt and cash and receivables of $105 million.

 

Shares in the company slumped by 10.3% to $2.78.