OROCOBRE FALLS WITH FOREIGN EXCHANGE
Written on the 3 March 2016 by Brisbane Business News
FOREIGN exchange has driven Orocobre to a loss of $28 million for the half year to December.
The mineral resource company, who took in revenues of more than $15 million, says it was exposed to currency exchange rate fluctuations when reporting in Australian dollars because its activities are mostly outside Australia.
Orocobre took a hit from the significant devaluation of the Argentine Peso over the period and the company has suffered one-off non-cash charges to its income statement and net assets because of this.
Orocobre's joint venture with Sales de Jujuy in Argentina operates under the Argentine Peso.
Sales de Jujuy's net assets were reduced by AUD$42.3 million as at the end of the reporting period, 30 December 2015, with AUD$28.2 million of this figure being Orocobre's share.
In a statement to the market, Orocobre says it expects the currency of this joint venture to change to the US Dollar in quarter four of fiscal year 2016.
In positive news for the company, it reports that the Argentine Government has moved quickly to lift economic restrictions and controls which is said to already have had an impact on its operations.
This includes removing the 'dollar clamp' to allow free flow of capital in and out of the Argentina, ending the artificially high official exchange rate by 'effectively allowing the floating of the Argentine Peso', removing most controls on the importation of goods into the country, and eliminating export taxes of almost all agricultural and industrial products.
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