UPDATE 2-Molycorp warns of impairment charge, delays results

Thu Feb 28, 2013 11:39am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Molycorp says goodwill charge to be "substantial"

* Impairment charge tied to takeover of Neo Material

* Shares down 2.2 pct on the NYSE (Adds analyst comment; updates share price move)

By Euan Rocha

TORONTO, Feb 28 (Reuters) - Rare earth producer Molycorp Inc on Thursday said it is delaying its quarterly results and its annual report because it has yet to determine the size of a goodwill impairment charge that will be recorded in the fourth quarter.

Molycorp said it expects the goodwill impairment charge, most of which will be related to its acquisition last year of rare earth processor Neo Material Technologies Inc, will be "substantial." Its shares fell 2.2 percent.

The company said it is writing down the value of the goodwill associated with the $1.3 billion acquisition of Neo Material. The writedown follows a warning by Molycorp last month of significantly lower-than-estimated revenue and cash flow for the first half of this year.

Molycorp, which had been expected to report financial results for the fourth quarter and 2012 full year later on Thursday, said it now expects to file its annual report by March 15. It said it will reschedule its earnings conference call to coincide with the filing.

A surge in metal prices following the 2008-09 economic crisis spurred mining companies across the globe to make costly acquisitions and develop mammoth projects, but capital expenditure costs have soared in the past year and metals prices have stagnated, forcing many of the world's largest miners to record major writedowns.   Continued...