OREANDA-NEWS. August 31, 2010. Kazakhmys PLC released half-yearly report for the period ended 30 June 2010.

OPERATIONAL HIGHLIGHTS

•        Sound production across all metals o Copper cathode equivalent of 164 kt

o Strong by-product output in zinc and silver

•        Strong growth in volumes at power business

o Power generated increased 43% to 5,373 GWh

•        Major copper growth projects remain on track

o Bozshakol feasibility study expected end of 2010 o Aktogay negotiations with Jinchuan continuing

FINANCIAL HIGHLIGHTS

•        Financial performance benefited from cost control and higher metals prices o Group EBITDA (excluding special items) increased 87% to USD 1,342 million

o    EPS based on Underlying Profit up 160% to 130 US cents per share

o    Interim dividend of 6.0 US cents per share

o    Balance sheet well positioned to fund future growth

o    Impact on earnings of higher social spend

•        Net cash costs ahead of target at 85 US cents per pound due to o Good management of the cost base

o Positive by-product volumes and pricing

•        Significant recovery in pricing

o Average realised copper price of USD 6,981 per tonne, an increase of 73% o Average power tariff increased 61% to 4.56 KZT/kWh

OUTLOOK

•        Outlook for copper market remains positive

•        Intensifying efforts to improve safety performance o Appointment of external consultant

•        Copper production on track to meet target of just over 300 kt o Costs for the full year should remain within the target range of 90 to 120 US

cents per pound

•        Power demand and pricing anticipated to remain firm o Output likely to exceed annual target of 10,400 GWh o Likely acceleration of investment programme

 

Six months

Six months

 

ended

ended

USD  million (unless otherwise stated)

30 June 2010

30 June 2009

Revenues

1,522

1,123

Earnings:

 

 

Group EBITDA (excluding special items)1

1,342

717

Segmental EBITDA (excluding special items)1

935

533

Profit before taxation

631

666

Underlying Profit

696

269

EPS:

 

 

Basic and diluted (USD )

1.07

0.96

Based on Underlying Profit2 (USD )

1.30

0.50

Free Cash Flow3

239

299

ROCE4 (%)

10

5

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

85

76

1 Reconciliation of Group and Segmental EBITDA (excluding special items) to operating profit is found in note 6(a)(iii).

2 Reconciliation of EPS based on Underlying Profit is found in note 11(b).

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

4  Profit 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.

Oleg Novachuk, Chief Executive of Kazakhmys PLC, said: “This has been a solid six months, with good production and cost control in our mining business, assisted by a more positive pricing environment. The power business is growing ahead of expectations, which should lead to an acceleration of the investment programme. We are intensifying our efforts to improve our safety record, including the appointment of external consultants. Our growth projects are progressing on track and we should be in a position to give significant updates by the time of our full year results. The market for our products has been firm and we remain positive on the outlook for copper.”