KAZ Minerals digs up stronger full-year earnings

The FTSE 250 firm said reported EBITDA was $351m, up from $202m, though that excluded pre-commercial earnings, while its operating profit improved 142% to $218m.

Gross revenues were 43% firmer at $969m.

The company posted full year copper sales volumes of 141 kt, up from 84 kt, which helped to offset the 12% lower copper price during the year.

Reported revenues were $766m, compared to $665m.

KAZ said the group net cash cost stood at 59 cents per pound for the year, compared to 109 c/lb in 2015.

At Bozshakol, the gross cash cost was 106 c/lb and the net cash cost was 27 c/lb, which the board said was supported by lower costs in the startup period, while at the East Region and Bozymchak assets the gross cash cost was 191 c/lb and the net cash cost was 68 c/lb, which was down from 109 c/lb in 2015.

Gross liquid funds stood at $1.12bn and net debt at $2.67bn on 31 December.

During the year, the company managed to reduce the Aktogay project budget by $200m to $2.1bn, and it confirmed $100m of final payments at Bozshakol would now fall in 2017.

A new $300m Development Bank of Kazakhstan facility and $50m increase to PXF was obtained in December, with the board added its gearing metrics were “significantly improved” during the year and remained set to reduce further.

“The successful launch of our major growth projects has increased copper output by 73% at an industry leading net cash cost of 59 c/lb,” noted chief executive Oleg Novachuk.

“Following the recent commencement of production at the Aktogay sulphide concentrator both Aktogay and Bozshakol are operational.

“KAZ Minerals is now well positioned to achieve its target of 300 kt of copper production in 2018, delivering significant copper growth with low operating costs into a strengthening market.”