21st Aug 2014 07:16
LONDON (Alliance News) - Kazakhmys PLC said Thursday that it narrowed its pretax loss in the first-half while revenue fell as the company reduced its output at several higher cost, lower grade operations as part of its restructuring programme.
In the six months to June 30, 2014, Kazakhmys said its pretax loss narrowed by more than half to USD118 million from the USD244 million loss reported last year. Revenue slipped during the period to USD1.30 billion from USD1.60 billion in 2013.
Underlying profit also fell, coming in at USD29 million from USD115 million in the comparable period last year.
In the first-half of 2014, output was reduced at several higher cost, lower grade operations as part of Kazakhmys' asset optimisation and cost efficiency programmes, said the FTSE 250-listed miner. Total ore extraction volumes reduced 7% to 18.2 million tonnes, with the copper ore grade correspondingly higher at 1.02%, resulting in a 1% decline of copper in ore mined compared to the previous period, it said. Copper cathode equivalent output was 139,200 tonnes, 4% below the level achieved in the first six months of 2013, due to a slight increase in stockpiled material, said the company.
Kazakhmys recently said it is restructuring to shift towards a production model dominated by large-scale, low-cost, open-pit mines. The company announced its restructuring proposal in February this year which was then approved by shareholders August 15. The company will change its name to KAZ Minerals PLC as part of the programme, set to transform Kazakhmys to focus on five cash generative operating mines, with exceptional future growth from its three "major growth projects."
KAZ Minerals will retain its four mines and connected concentrators in the East Region, the Bozymchak mine and the concentrator in Kyrgyzstan, as well as its major growth projects, it said, with future output expected to increase "significantly." The Bozshakol and Aktogay oxides are on track for commissioning in the second-half of 2015, said the miner.
In July Kazakhmys unveiled an agreement to dispose of mature mining assets in the Zhezkazgan and Central Regions of Kazakhstan as part of the restructuring plan.
Looking ahead, the company said its restructured group will focus on copper production, with a view to increase "full-year cathode equivalent output of 80,000 to 85,000 tonnes," though said in a statement that this outlook is partly offset by reduced by-product output.
"We have delivered significant transformation in the past 18 months, with the disposal of our non-core assets and proposed restructuring. We are focused on copper, a metal with an exceptional outlook, and following completion of the restructuring we will be a low cost copper producer, providing industry leading growth and the potential for attractive future returns to shareholders. I look forward to reporting on our continued progress," said Oleg Novachuk, Chief Executive of Kazakhmys.
Shares in Kazakhmys were trading 0.97% higher at 311.50 pence per share Thursday morning, amongst the biggest gainers on the FTSE 250.
By Alice Attwood; [email protected]; @AliceAtAlliance
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