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ANNUAL REPORT 2010

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Skip Navigation LinksManagement Discussion and Analysis > Financial Review > Segment Gross Profit

Segment Gross Profit

YEAR ENDED 30 JUNE 2010 YEAR ENDED 30 JUNE 2009
LHMKMTOTALLHMTOTAL
Volume Sold (lb)2,726,0001,000,0003,726,0002,021,0002,021,000
Average Sales Prices/lbUS$54/lbUS$55/lb
RevenueUS$202.0MUS$111.8M
Cost of Sales (C1)US$72.1MUS$59.5M*US$131.6MUS$53.0MUS$53.0M
Cost of Sales/lb (C1)US$26/lbUS$26/lb
Profit after C1 costsUS$70.4MUS$58.8M
Other revenue and costs,
mainly depreciation
US$19.4MUS$10.4M
GROSS PROFITUS$51.0MUS$48.4M

* Unit product costs at KM were higher as a result of expected ramp-up costs as well as the cost of material obtained from Paladin Nuclear Ltd to meet customer obligations during start-up. Going forward it is anticipated that sales will be met from material produced at KM.

Sales of 3,726,000lb at an average of US$54/lb generated revenue of US$202M in the year ended 30 June 2010. This compares with sales of 2,021,000lb at an average of US$55/lb generating revenue of US$111.8M in the year ended 30 June 2009.

Cost of Sales for LHM in the year ended 30 June 2010 remained at US$26/lb which reflects a strong production performance from LHM. Production ramp-up continued at KM until 30 June when the Company declared that KM had achieved commercial production with effect from 1 July 2010. KM cost of sales includes 530,000lb of material loaned from Paladin Nuclear Ltd at US$53/lb. The Paladin Nuclear Ltd material has been used to manage variations in production and sales delivery schedules during KM’s ramp-up of production.

Profit after C1 costs increased from US$58.8M to US$70.4M directly attributable to higher sales volumes for 2010.