The Champion Iron (ASX: CIA) share price is up 4% today after delivering an outstanding 419% jump in profits. Here’s the rundown.
The post The Champion Iron (ASX:CIA) share price lifts on 419% profit news appeared first on The Motley Fool Australia. –
Sure, Fortescue Metals Group Ltd (ASX: FMG) and BHP Group Ltd (ASX: BHP) are leveraging sky-high iron ore prices and making a lot of money. But Champion Iron Ltd (ASX: CIA) just delivered an extraordinary jump in profits after announcing its FY21 results.
The market was quick to pick up on its success, with the Champion Iron share price jumping 7.4% to an intraday high of $7.06. Its shares have since pulled back, currently trading 4.26% higher at $6.86.
Champion Iron is an iron ore exploration and development company with a number of projects in Canada’s Québec region.
Champion Iron share price jumps on profit surge
Champion Iron announced its operational and financial results for the fourth quarter and fiscal year ended March 31, 2021.
The company delivered revenues of CA$1,281.8 million (A$1,366.8 million) in FY21, representing a 63% increase on FY20 figures. This translated into record FY21 net profits of CA$464 million (A$495 million), a 419% increase on the prior corresponding period.
During this period, Champion Iron produced 8,001,200 wmt of high-grade 66.4 Fe concentrate, compared to the 7,903,700 wmt for the same period in 2020.
The announcement highlighted a number of growth accomplishments in FY21 including the approval and decision to complete its Phase II expansion project. This move will double the production of its flagship Bloom Lake project to 15 Mtpa by mid-2022. In April 2021, the company also completed the acquisition of the Kami Project, a high-grade iron ore project located a few kilometres away from Bloom Lake.
Not only did Champion Iron deliver an outstanding financial and operational result, but the company has made a conscious effort to improve its environmental performance. The exceptional purity and quality of its iron ore significantly contributes to the reduction of greenhouse gas emissions in the steelmaking industry.
Why its been a volatile ride for iron ore miners
ASX iron ore miners have been all over the place as investors juggling sky-high iron ore prices of more than US$200/tonne against a steady stream of negative news from China.
China has made a number of announcements that could have significant ramifications for iron ore prices in the near term. This includes plans to increase its own domestic production, moves to strengthen its domestic management of commodities to fight against “unreasonable prices” and urging domestic players to safeguard price stability.
While the Champion Iron share price has managed to stand strong in recent weeks, other iron majors such as Fortescue and BHP have both slipped around 10% since mid-May.
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