$120m profit jump sends Grange Resources (ASX:GRR) share price 37% higher

Shares in Grange Resources are charging higher on Monday as the company released its financial results for the full year on Friday.

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Key points

  • Grange Resources released its full year results after the closing bell on Friday 
  • Investors have responded well on Monday sending shares over 37% into the green with little recourse during the day 
  • In the last 12 months, the Grange Resources share price has spiked 124% 

Shares in Grange Resources Ltd (ASX: GRR) are charging higher today after the company released its financial results for the full-year ended 31 December 2021 on late Friday afternoon.

At the time of writing, the Grange Resources share price is trading at $1.01, a 37% spike from the open on Monday.

Grange Resrources share price jumps on earnings growth

Key takeouts from the company's earnings results on Friday include:

  • Revenues from operations of $781.7 million compared to $526.3 million for the prior year
  • Pellet production of 2.60 million tonnes for the year compared to 2.35 million tonnes for the prior year
  • Total iron ore product sales of 2.62 million tonnes for the year compared to 2.49 million tonnes for the prior year
  • Profit after tax of $321.6 million for the year compared to $203.2 million for the prior year
  • Average realised product price of $276.17 per tonne for the year compared to $196.77 for the prior year
  • Unit C1 cash operating costs of $99.73 per tonne for the year compared to $99.77 for the prior year
  • Cash and cash equivalents position of $443.9 million at the end of year compared to $183.4 million at the end of the prior year
  • Fully franked special dividend for year ended 31 December 2021 of 10 cents per share

What happened this period for Grange Resources?

Grange noted that total sales for the year were 2.62 million tonnes, up from 2.49 million tonnes in 2022. The gain reflects "sustained production from maintaining access to high grade ore".

This enabled Grange to recognise total revenue of $782 million for the year, a mammoth 144% gain from the previous year.

As a result, the company grew its after-tax profit from $203 million to over $321 million in 2021 and the company left the year with $444 million in cash on the balance sheet.

Curiously, Grange reports no impact to its earnings profile from COVID-19 lockdowns, a clear distinction from most other ASX players in 2021.

"To date, the Company has had no material production impact due to COVID-19", it said. "The impact of the pandemic continues to be well managed across our operations".

Grange also announced it has adopted an "Environmental, Social, and Governance (ESG) framework with 21 core metrics and disclosures as created by the World Economic Forum (WEF)".

It has subsequently engaged "impact monitoring technology platform Socialsuite" to streamline the process.

"The Company's goal is to demonstrate commitment and progress on making ESG disclosures, but more broadly, aims to progress a range of ESG benchmarks as set out by the WEF's ESG White Paper", Grange said.

What's next for Grange Resources?

Grange says that its focus is to "generate shareholder value by safely producing high quality iron ore products from its Savage River and Port Latta operations in Tasmania".

Not only that, but it is also going to "assess the feasibility of a major iron ore development project at Southdown, near Albany in Western Australia".

It also intends to manage its business risks with prudence by focusing on fluctuations in the iron ore market, monitoring geotechnical risks and "optimise timing of sales to the fluctuations in iron ore prices and demands from different markets".

Grange Resources share price snapshot

In the last 12 months, the Grange Resources share price has spiked 124% and is up 34% year to date.

TradingView Chart

During the past month of trading, shares have jumped 34% and hence Grange is thus leading the broad indexes this year.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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