Arrium (ARI) is tipping "significant" earnings growth in the current year and continued strong Chinese demand for iron ore after swinging to a heavy full-year loss on more than $1 billion in impairment and restructuring charges.
While Arrium slumped to a loss of $694.7 million, after taking $930.2 million in impairments of its recycling and steel assets and $93.8 million in redundancy and restructuring costs, underlying profit for the period came in well above analyst estimates.
The company posted net profit excluding significant items of $168 million, $21.5 million more than what analysts had pencilled in for the period.
Shares in the stock leapt 11.7% to $1.10 in response – their biggest increase in 10 months.
Revenue fell 3.6% to $6.08 billion.
"The decrease in underlying NPAT for the year was primarily due to the impact of lower iron ore prices in the mining business, which more than offset the benefit from increased iron ore sales volumes, and higher earnings in the mining consumables and steel businesses," the group said.
It will pay an unfranked final dividend of three cents, bringing the total dividend to five cents, which is in line with consensus forecasts.