KAZ Minerals PLC (LON:KAZ) has today announced its half-yearly report for the period ended 30 June 2019.
FINANCIAL HIGHLIGHTS
· Revenues of $1,052 million (H1 2018: $1,098 million)
– Production-driven 3% increase in copper sales volumes, offset by 11% lower LME copper price
· EBITDA1 of $620 million representing a 59% margin (H1 2018: $690 million, 63% margin)
· Operating profit of $410 million (H1 2018: $464 million)
· Industry leading first quartile net cash cost1 of 80 USc/lb (H1 2018: 82 USc/lb)
OPERATIONAL HIGHLIGHTS
· Copper production2 increased by 6% to 147.6 kt (H1 2018: 139.6 kt)
· Aktogay achieved record first half production of 74.1 kt (H1 2018: 60.5 kt)
· On track to achieve full year guidance for main products of copper and gold
FINANCIAL POSITION
· Net debt1 increased to $2,560 million at 30 June 2019 (31 December 2018: $1,986 million)
– $436 million cash consideration paid for acquisition of Baimskaya copper project in H1 2019
– $332 million invested into growth projects, principally the Aktogay expansion
· Borrowings of $3,299 million at 30 June 2019 (31 December 2018: $3,453 million)
· Gross liquid funds1 of $739 million at 30 June 2019 (31 December 2018: $1,467 million)
– $480 million to be drawn in 2019-20 under new $600 million DBK facility for Aktogay expansion project
· Interim dividend of 4.0 US cents per share declared
GROWTH PROJECTS
· Completed the acquisition of the Baimskaya copper project in Russia, a globally significant deposit, on 22 January 2019
– Feasibility study on track to be completed in H1 2020
– Government funded road and power infrastructure progressed in period
– Capital expenditure guidance for 2019 increased to $150 million, including $80 million approved for pioneer works and on-site infrastructure in second half of 2019
· Aktogay expansion project on schedule and on budget ($1.2 billion)
– Concentrator and crusher structural works underway, new mining equipment commencing operations
– Capital expenditure timing rephased, 2019 guidance now $500 million
OUTLOOK
· Short term copper market outlook more cautious due to continuing trade pressures and China slowdown concerns, but long term outlook remains robust
· Full year copper production guidance maintained at c. 300 kt
· Low cost asset base creates strong platform for growth
| $ million (unless otherwise stated) | Six months ended 30 June 2019 | Six months ended 30 June 2018 |
| Revenues | 1,052 | 1,098 |
| EBITDA1 | 620 | 690 |
| Operating profit | 410 | 464 |
| Profit before tax | 289 | 355 |
| Profit for the period | 227 | 276 |
| Ordinary EPS and EPS based on Underlying Profit1 – basic ($) | 0.48 | 0.62 |
| Ordinary EPS and EPS based on Underlying Profit1 – diluted ($) | 0.47 | 0.62 |
| Net cash flows from operating activities | 236 | 350 |
| Free Cash Flow1 | 182 | 308 |
| Gross cash cost1 (USc/lb) | 144 | 145 |
| Aktogay | 101 | 109 |
| Bozshakol | 157 | 127 |
| East Region and Bozymchak | 236 | 250 |
| Net cash cost1 (USc/lb) | 80 | 82 |
| Aktogay | 96 | 107 |
| Bozshakol | 42 | 55 |
| East Region and Bozymchak | 103 | 77 |
| Borrowings | 3,299 | 3,705 |
| Cash and cash equivalents | 739 | 1,653 |
| Net debt1 | 2,560 | 2,052 |
1 Alternative Performance Measures (“APMs”) are used to assess the performance of the Group and are not defined or specified under IFRS. For further information on APMs, including justification for their use, please refer to APMs section on page 49.
2 Payable metal in concentrate and copper cathode from Aktogay oxide ore.
Andrew Southam, Chief Executive Officer, said: “KAZ Minerals recorded EBITDA of $620 million in the first half of 2019, delivering increased production and maintaining the Group’s industry leading low cost position. The Group’s near and long term growth projects at Aktogay and Baimskaya are both on track, with the primary crusher, sulphide concentrator and mining fleet upgrade progressing well at Aktogay and pioneer works at Baimskaya approved to commence in the second half of 2019.”
