Kazakhmys swings to $962 mln H1 loss
ALMATY. Aug 22 (Interfax) - Kazakhmys plc had net losses of $962 million to International Financial Reporting Standards (IFRS) in H1 2013, compared with profit of $122 million in the same period last year, the Kazakh miner said in a report.
Revenue from continuing operations grew 3.6% to $1.571 billion, earnings before taxes, depreciation and amortization (EBITDA) fell 29.1% to $714 million and gross profit was down 19.9% to $503 million.
"We delivered strong production volumes for all our key metals in the first six months of 2013, although the financial results were impacted by lower metal prices and higher costs. Rising industry costs over the past few years have created a significant challenge for Kazakhmys, reducing profitability and cash generation. We have seen some improvement in cost inflation to date in 2013, but further cost reduction is a key priority for management with the objective of generating sustainable positive cash flow from our core copper operations," Kazakhmys said.
Segmental EBITDA (excluding special items) was $438 million, compared to $679 million in the first six months of 2012, as higher revenues were offset by increased costs.
"Group EBITDA (excluding special items) was $714 million for the period, which includes $ 276 million arising from our 26% share in ENRC. The contribution from ENRC was impacted by lower metal prices and cost pressures. As a consequence of the decision to dispose of our holding in ENRC it has been reclassified as a discontinued operation," according to the statement.
"Net debt increased to $1.260 billion at the period end, compared to $707 million at 31 December 2012, largely due to spending on major projects. In the second half of 2013 net debt, excluding the ENRC disposal proceeds, will increase as we continue this investment."
"We expect to receive $875 million of net cash proceeds from the sale of our ENRC holding by the end of the year, which will significantly reduce our net debt, but we will continue to take action to improve cash flow and strengthen our balance sheet through our optimization programme," said the company.
BTA Securities Chief Industry Specialist Shaimerden Akhmetov said earlier that Kazakhmys in January-June 2013 would post $102 million net profit, $1.55 billion revenues and $420 million EBITDA. BCC Invest analyst Adil Tabyldiev forecast the group's revenue in the reporting period would be $1.45 billion, and operating profit - $133 million.
Kazakhmys plc is a leading international natural resources group with significant interests in copper, gold, zinc, silver, power generation and petroleum.