Billionaire Chris Ellison’s Mineral Resources appears to have escaped any regulatory sanctions over a shock plunge in interim profit that savaged its shares.
The mining and services group was immediately queried in the wake of the February 9 result by the Australian Securities Exchange, which sought assurances that MinRes had not breached disclosure rules.
There has been speculation that MinRes had been asked for board papers as part of a regulatory probe.
But the ASX, which is seen in some quarters as reluctant to take on bigger ASX members, said it had been satisfied by MinRes’ February 14 reply to the query that it was in compliance with its disclosure obligations.
MinRes’ December-half profit crashed 96 per cent to $19.2m, with the company blaming soaring shipping and haulage and operating costs, supply chain and labour tightness, lower iron ore prices and increased royalty payments.
The result, which was accompanied by the cancellation of the company’s interim dividend, was much worse than expected and sent MinRes shares up to 10 per cent lower on the day.
Goldman Sachs had sounded a warning a week earlier by suggesting that the market had underestimated the impact of the costs spike, including MinRes on a list of companies at risk of bombing with their results.
Under the ASX disclosure rules, member companies are obliged to disclose any market-moving information when they become aware of it.
MinRes said a draft of its half-year accounts was provided to some directors on January 31 and approved by the full board on February 8.
It told the ASX in its response that investors who followed the company would have been well aware of the impact of the major factors weighing on its results, including the lower iron ore price and the rising costs, pointing out they had been widely aired at last year’s annual meeting and the December quarterly announcement.
MinRes argued that the issues were “unlikely” in isolation to have triggered the share price plunge.
Instead, the company said it was “of the view that the decision to not pay an interim dividend may have surprised some shareholders”, adding that revised full-year guidance provided with the interim results may have also driven the stock down.
“MinRes is of the view that it released the 2022 first half results information promptly and without delay.”
The stock closed 6.4 per cent down at $43.72 on Thursday in a sharply lower overall market.