25th Feb 2016 09:11
LONDON (Alliance News) - KAZ Minerals PLC Thursday said it managed to squeeze out a tiny profit in 2015 despite experiencing a decline in revenue, as the copper miner aims to grow production and lower costs over the next few years.
KAZ shares were up 8.6% to 157.50 pence per share on Thursday morning.
KAZ, which operates in Kazakhstan, reported a pretax profit of USD12.0 million in 2015. Although a tiny sum, that profit compares to the USD169.0 million loss booked in 2014.
The profit was achieved was despite revenue falling to USD665.0 million from USD846.0 million, as significantly lower impairments and exceptional items, alongside a reduction in finance costs, helped push the miner back into the black despite the difficult market conditions.
Impairments in 2015 only amounted to USD15.0 million in 2015 compared to USD137.0 million last year, whilst other exceptional items provided a USD2.0 million net gain compared to a USD132.0 million loss in 2014. Finance costs were also lower at USD270.0 million, compared to USD399.0 million.
Finance costs may have fell in the year, but the company's net debt rose considerably, standing at USD2.25 billion at the end of 2015 compared to USD962.0 million at the end of 2014.
Operationally, KAZ hit its production guidance in the year, while also managing to lower its cash costs even further than originally expected. KAZ also laid out considerably less in sustaining capital expenditure in the year than it budgeted.
In 2016, KAZ is aiming to produce "industry leading" growth, aiming to increase production by 50% per year until 2018 through its expansion projects at the Bozshakol and Aktogay mines. The increase in production will also benefit from the company's continuing focus to lower costs further.
"Our immediate priorities in 2016 are the ramp up of Bozshakol, the construction of Aktogay and to keep operating costs low across the group. The delivery of our world-class projects will enable us to de-gear the balance sheet and complete our transformation into a low-cost operator of large scale, open-pit copper mines in Kazakhstan," said Chief Executive Oleg Novachuk.
By Joshua Warner; [email protected]; @JoshAlliance
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