30th Mar 2015 09:54
LONDON (Alliance News) - Central Asia Metals Ltd Monday reported higher net profit in 2014, after it took full control of the Kounrad project in Kazakhstan and saw production rise above its expectations, helping offset a fall in copper prices.
The copper miner also said it will pay a 7.5 pence final dividend, bringing the total for the year to 12.5 pence, as long as it gets shareholder approval for a proposed share premium cancellation in order to restructure its balance sheet and increase the amount of distributable reserves.
The cancellation would allow the company to continue to pay dividends and to repurchase its shares as and when the directors decide this is appropriate.
Central Asia reported a net profit of USD59.5 million for 2014, up from USD34.5 million in 2013, as gross revenue rose to USD76.6 million from USD54.1 million. Earnings before interest, tax, depreciation and amortisation rose 46% to USD47.3 million, from USD32.4 million.
It said production at Kounrad reached 11,136 tonnes of cathode copper, up 6% from 10,509 tonnes in 2013, and above its target of 11,000 tones. Its C1 cash cost of production fell to USD0.71 a pound, from USD0.73 a pound.
It sold 11,163 tonnes of copper at an average price of USD6,794 a tonne, compared with 10,689 tonnes at USD7,114 a tonne in 2013.
"During 2014 the copper price fell by 18% and a further reduction in prices was seen in January 2015. Indeed, by the end of January 2015 copper prices had fallen to a five and a half year low of approximately USD5,505 per tonne," it said.
"Whilst such price reductions are not ideal they are also outside of our control. Consequently, we will focus our efforts on what we can control and strive to maintain our low cash costs of production and meet our production target for 2015 of 13,000 tonnes of copper. Delivery on time and within the capital budget of the expansion programme at Kounrad is a primary objective for the year," it said.
It has a production target of 13,000 tonnes for Kounrad in 2015, rising to 15,000 tonnes in 2016, thanks to expansion projects it has underway at the site. It said stage one of the plant expansion is under budget and on schedule to complete in the second quarter of 2015.
"The expansion of the plant is firmly on track and will increase our annual production capacity further to 15,000 tonnes by 2016. A continued focus on cost control by all our employees has allowed us to remain in the lower quartile of the industry's cost curve and we are confident that this position will be maintained as we expand production. Our excellent performance in 2014 is reflected in the final dividend our board has proposed, and we remain committed to delivering returns to all our shareholders," Chief Executive Nick Clarke said.
Central Asia Metals shares were up 4.5% at 162.00 pence Monday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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