OREANDA-NEWS. On 03 September 2009 was announced, that Kazakhmys PLC announced half-yearly report for the period ended 30 June 2009 financial & production overview.

·        Increased production and sales reflect success of management actions to maximise efficiency

o   Production of 170 kt of copper cathode equivalent, an 8% increase on the

previous period, assisted by use of stockpiled ore and productivity improvements

o   Sales of 200 kt of copper cathode equivalent, benefiting from reductions in inventory

·        Cash costs significantly lower than 2008

o   Net cash costs of 76 US cents per pound, compared to 116 US cents per pound

for the full year 2008 o   Aided by cost reductions, lower input prices, currency devaluation and higher

volumes in copper and by-products

·        Average realised copper price of USD 4,024 per tonne in 1H 2009 o   51% below average realised copper price for 1H 2008

o   Current price of USD 6,305 per tonne recovering from USD 2,902 per tonne at year end

·        Financial performance benefited from improved costs and higher sales volumes, but affected by lower period on period copper prices

o   Revenue declined 42% to USD 1,648 million

o   EBITDA declined 49% to USD 533 million excluding share of EBITDA from ENRC

o   Cash generated of USD 406 million

OTHER HIGHLIGHTS

·        Progress on major copper growth projects

o   Pre-feasibility studies completed at both Aktogay and Boschekul

·        Significant improvements in power tariffs in Kazakhstan

o   Creating a commercial environment for further investment and expansion of power assets

OUTLOOK

·        Copper production expected to exceed annual target of 300 kt given additional 15 kt produced from stockpiled material

o   Costs for the full year should be at the lower end of the target range of 90 to 120 US cents per pound

·        Power demand anticipated to increase in H2 along with further expected increase in tariffs

 

Six months

Six months

 

ended

ended

USD  million (unless otherwise stated)

30 June 2009 1,648

30 June 2008

Revenues

2,838

Earnings:

 

 

Group EBITDA excluding special items1

717

1,050

Profit before taxation

645

886

Underlying Profit

269

610

EPS:

 

 

Basic and diluted (USD )

0.96

1.34

Based on Underlying Profit2 (USD )

0.50

1.34

Free Cash Flow3

299

391

ROCE4 (%)

5

11

Cash cost of copper after by-product credits5 (USc/lb)

76

94

Reconciliation of Group EBITDA excluding special items to operating profit is found in note 5(a).

2 Reconciliation of EPS based on Underlying Profit is found in note 9(b).

3 Net cash flows from operating activities less sustaining capital expenditure on tangible and intangible assets.

4  Profit from all operations before taxation and finance items, excluding special items, as a percentage of the average of opening and closing capital employed.

5  Total of Kazakhmys Copper cash operating costs excluding purchased concentrate less by-product revenues, divided by the volume of copper cathode equivalent sales.

All references to USD  refer to US dollars unless otherwise stated.

Oleg Novachuk, Chief Executive of Kazakhmys PLC, said: “This has been a strong six month performance with a successful execution of our operational initiatives delivering higher production and lower costs. Their actions, combined with a recovering copper price and targeted capital expenditure, led to solid cash flow generation and an improving balance sheet. Demand for copper has been positive and with our strong customer relationships in China we have been well placed to take advantage of this opportunity. Demand in our power business has been modest, but the outlook for both demand and pricing is improving. Going forward we will continue to focus on operational efficiencies, cash flow generation and to move forward with our growth opportunities.”