Finance Finance News Mining jobs, profits suffer another blow

Mining jobs, profits suffer another blow

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Plummeting resources prices have hit the bottom line and employment capacity of two more of Australia’s resources companies, Arrium and Woodside Petroleum.

Mining and materials group Arrium has blamed weak iron ore prices for a $1.5 billion first half loss, and it expects the low prices to persist.

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Woodside, meanwhile, said it will cut more than 300 jobs this year as it slashes expenditure following a sharp fall in the oil price. Overall, however, its profits rose.

Arrium’s huge loss was mostly down to $1.34 billion in impairments, flagged in January when it axed 600 jobs and said it would close one of its two iron ore projects in South Australia.

But stripping out the impairments, the company still made a $22 million underlying net loss.

“External factors, including the sharp and substantial fall in iron ore prices, as well as historic low South East Asian steel margins, made the half a very challenging one,” Arrium chief executive Andrew Roberts said.

In addition to its 300 job cuts, Woodside has also shelved plans to develop the Sunrise gas field off East Timor because of regulatory and fiscal uncertainty.

The Perth-based company is also cutting its 2015 operating expenditure by around 15 per cent and investment expenditure by around 20 per cent after the oil price halved over the past six months.

However, Woodside lifted its full year profit by 38 per cent and re-affirmed its production targets for 2015.
 The energy giant’s net profit rose to $US2.4 billion for the year to December 31, up from $US1.7 billion, while revenue lifted by a quarter to $US7.4 billion.

– with AAP

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