Kazakhmys Plc, Kazakhstan’s biggest copper producer, posted a first-half loss and scrapped its interim dividend after prices for the metal fell.
Kazakhmys reported a net loss of $962 million compared with net income of $121 million a year earlier, the London-based company said today in a statement.
Copper producers around the world have seen profits eroded by declining metal prices and rising costs. Poland’s KGHM Polska Miedz SA this month reported a 56 percent slump in quarterly profit, while Australia’s OZ Minerals posted a first-half loss and Germany’s Aurubis AG cut its full-year earnings forecast.
Kazakhmys said its average copper selling price fell 9 percent in the first half to $7,508 a metric ton, while gross unit cash costs increased 5 percent.
“Given the low level of free cash flow currently generated by the core business, the capital expenditure on the major growth projects and the uncertain economic outlook, the board believes it would be inappropriate to pay an interim dividend,” the company said. It announced a 3-cent payout a year ago.
Kazakhmys said it’s set to receive $875 million in cash and about 77 million of its own shares from the sale of its Eurasian Natural Resources Corp. stake. Shareholders approved the sale earlier this month, paving the way for ENRC’s founders to take the mining company private.
Kazakhmys, which produced 144,000 tons of copper cathode in the first half, is reviewing its mines to boost cash generation and profitability. Sales in the first half rose 3.6 percent to $1.57 billion. Its shares climbed 1.9 percent to 307.2 pence as of 8:04 a.m. in London.