Revenue for the six-month period improved to $A113.9 million from $105.9 million due to a 16% rise in the average realised nickel price to $6.59 per pound.

Earnings before interest, tax, depreciation and amortisation were up by 58% to $29.4 million.

Western Areas posted a slim net profit after tax of $500,000, up from a $20 million net loss in the same period of 2015.

Net profit was impacted by $2.9 million due to a quotational price adjustment in January.

The company’s balance sheet remains strong with no debt and $124.7 million in cash and receivables at the end of December.

Western Areas managing director Dan Lougher said that gave the company options around developing Cosmos, restarting the mill recovery enhancement project at Forrestania, and boosting exploration.

The company already restarted vertical development at Spotted Quoll last month, and a prefeasibility study for Odysseus at Cosmos is due next month.

“We hope to be able to do a few things this year,” Lougher told investors on a teleconference.

The strong performance in the first half has allowed Western Areas to upgrade full-year nickel in concentrate production to 22,000-23,000 tonnes from 20,200-22,000t.

Unit cash cost guidance has been lowered to $2.35-2.50/lb from $2.40-2.75/lb.

“It wasn’t something we expected to do, but the mining team has performed exceptionally,” Western Areas finance director David Southam said.

The company said there was no upgrade to capital expenditure or exploration guidance at this stage, but its strong balance sheet gave it flexibility.

In addition, the improving nickel price and new offtake agreements were expected to enhance results in the current half.

Western Areas did not declare a dividend, but said it would consider restarting payouts if the nickel price remained around current levels of roughly $US11,000 per tonne.

 

Shares in Western Areas rose by 0.4% this morning to $A2.59 after peaking at $3.44 last month.