Mining Industry Profits Stabilise

Mining industry profits may have started to stabilise during the first half of 2016 with two consecutive quarterly rises, albeit only modest, in seasonally adjusted pre-tax profits in the March and June quarters of 2016, according to the Australian Bureau of Statistics, after a dramatic cyclical decline over the prior four years. The ABS reported that pre-tax sector profits in the June quarter were 33% lower than a year earlier. Profits of $16.98 billion in the 12 months ended June 2016 were 42% lower than over the corresponding period a year before. Profits ended the quarter 80% lower than at their cyclical peak in the September quarter of 2011. The ABS also estimated that another $56.5 billion in capital was outlayed by the industry over the 12 months ended June. The less dramatic slump in capital spending lessened the chance of the industry, already facing an improbable task, achieving an adequate return on the investments made through the earlier phases of the recent cycle. (VIEW LINK)