BC Iron flags lower H2 profit

Production up, costs rise during wet season.

BC Iron's Nullagine joint venture increased its output more than expected in the March quarter but a particularly heavy wet season has pushed cash costs above guidance and the company now expects revenue and profits to be lower in the second half of 2014.

The company shipped 1.22 million wet metric tonnes of iron ore in the March quarter, higher than its wet season guidance of 1.13 million wet metric tonnes.

During the quarter, cash costs were $54 per wet metric tonne and the company has advised that it is likely to see full year cash costs at the higher end of 2014 guidance at around $46 to $50 per wmt.

The company said higher cash costs combined with lower sales and a lower iron ore price will meant its revenue and profits will be lower in the second half of full-year 2014 compared to the first half.

BC Iron paid its 75% share of joint venture operating costs despite its share of sales for the quarter being 62%, although this discrepancy will balance out over a whole financial year.

The miner also noted it had not received revenue of $22.9 million for two shipments in late March.