Western Areas Announces Half Year Financial Results and FY17 Guidance Upgraded

PERTH, AUSTRALIA--(Marketwired - Feb. 21, 2017) -

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Western Areas Ltd (ASX:WSA) ("Western Areas" or the "Company") today announces the Company's financial results for the half year ended 31 December 2016 ("1HFY17") and an upgrade to certain guidance metrics for the financial year (FY17).

The Company is pleased to report a return to profitability, strong free cashflow generation, EBITDA improvement of 58% over the prior corresponding half and a debt free balance sheet with A$103.8m cash at bank. Furthermore, FY17 guidance metrics for mine production, mill production and unit cash cost of production have all been materially improved following a strong first half performance.

Key Metrics:

• Cash at bank and receivables of A$124.7m (A$46.7m) and debt free;
• Pre-financing cashflow of A$22.5m an improvement of A$42.0m versus 1HFY16
• Sales revenue of A$113.4m (A$105.9m);
• Average realised price of nickel increased by 16% to A$6.59/lb (A$5.70/lb);
• EBITDA of A$29.4m (A$18.6m), representing an increase of 58%;
• Reported Net Profit After Tax (NPAT) of A$0.5m (A$20.0m NLAT);
• Unit cash cost of production A$2.44/lb (A$2.25/lb) at the lower end of FY17 guidance; and
• Capital expenditure and exploration cash spend reduced by A$24.6m
  (Comparisons in brackets refer to the corresponding period 1HFY16)

The first half included a number of achievements and milestones that assisted with the significantly improved financial results and will underpin the future of the Company. These included ZERO lost time injuries, an increase in the realised nickel price, mine grade performance above plan, record Spotted Quoll nickel output, improved offtake terms for the next three years and early encouragement from exploration activities at Cosmos.

Western Areas notes that post 31 December 2016, there has been significant volatility in the nickel price following geo-political decisions in Indonesia and the Philippines. We do not expect the issues surrounding the differing positions of these countries to resolve in the very short term, but do expect to see clarity in the coming months. We are however encouraged by other fundamentals such as the continuing growth in production of 300 series stainless steel in China which contains the highest contribution of nickel and the growing battery market which also requires nickel as a key input.