Citic Pacific's Aussie iron-ore mine delayed again as profit drops 19pc

Steel-to-property conglomerate Citic Pacific has warned of the possibility of further delays in commissioning the second production line of its over-budget iron-ore project in Australia, after posting a lower interim profit.

The state-backed firm said its net profit for the first half dropped 18.6 per cent year on year to HK$4.46 billion as the losses incurred by its iron-ore project increased and non-recurring gains fell. Turnover dropped 14.3 per cent to HK$41.29 billion.

It booked a HK$2.06 billion gain from the sale of an 18.6 per cent stake in Citic Telecom in the first half and recorded a HK$2.49 billion gain from the sale of a stake in information technology unit Citic Guoan in the year-earlier period.

The net loss of its Australian iron-ore project widened to HK$1.05 billion from HK$110 million in the year earlier period because it began to book interest expenses when mine production began.

The iron-ore project, delayed three years and over budget at least three times its original estimate, has been hobbled by technical problems since it was commissioned late last year.

Citic Pacific said problems with the first production line have been addressed and that it had been re-commissioned. It added that more time was required to establish its reliability.