Half-Yearly Results 2018

KAZ MINERALS PLC HALF-YEARLY REPORT FOR THE PERIOD ENDED 30 JUNE 2018

WATCH WEBCAST

 

FINANCIAL HIGHLIGHTS
  • Revenues of $1,098 million (H1 2017: Gross Revenues1 of $837 million, revenues of $721 million)
  • Increase in revenues supported by 22% copper sales volume growth and a 20% higher average LME copper price
  • EBITDA1 of $690 million representing a 63% margin (H1 2017: Gross EBITDA1 of $505 million, EBITDA1 $429 million)
  • Operating profit of $464 million (H1 2017: $291 million)
  • Group gross cash cost1 of 145 USc/lb, in line with H1 2017 (144 USc/lb)
  • Industry leading first quartile net cash cost1 of 82 USc/lb (H1 2017: 64 USc/lb)
OPERATIONAL HIGHLIGHTS
  • Aktogay sulphide concentrator achieved design throughput capacity
  • Copper production increased by 18% to 140 kt (H1 2017: 118 kt 
FINANCIAL POSITION
  • Net debt1 of $2,052 million at 30 June 2018, $250 million deferred from 2016 paid to Aktogay contractor in H1 2018 and commenced investment in Aktogay expansion
  • Gearing level reduced, net debt to EBITDA ratio of 1.4x
  • Borrowings of $3,705 million and cash and cash equivalents of $1,653 million
  • Interim dividend of 6.0 US cents per share declared, marking the successful delivery of the Bozshakol and Aktogay projects
GROWTH PROJECTS
  • Announced the acquisition of the Baimskaya copper project in Russia on 2 August 2018, a globally significant copper deposit. Transaction completion expected in first half of 2019, subject to regulatory approvals
  • Aktogay expansion project launched in December 2017 with engineering, contracting and earthworks progressing well
OUTLOOK
  • Full year copper production guidance maintained at 270-300 kt and by-product targets unchanged
  • Cost guidance unchanged, as strong unit cost performance expected to continue in second half
  • Medium term copper market outlook remains positive, as supply from existing mines declines and demand from both traditional and new sectors continues to grow

$ million (unless otherwise stated)

Six months

ended

30 June 2018

Six months

ended

30 June 2017

Gross Revenues1,2

1,098

837

Gross EBITDA1,2,3

690

505

 

 

 

Revenues

1,098

 721

EBITDA (excluding special items)1,3

690

 429

 

 

 

Operating profit

464

291

Profit before tax

355

 240

Profit for the period

276

 185

EPS – basic and diluted ($)

0.62

 0.41

EPS – based on Underlying Profit ($)1,4

0.62

 0.44

 

 

 

Net cash flows from operating activities

350

337

Free Cash Flow1,5

308

 155

Free Cash Flow before interest1,5

420

 269

 

 

 

Gross cash cost (USc/lb)1,2

145

 144

Net cash cost (USc/lb)1,2

82

 64

 

 

 

Cash and cash equivalents

1,653

1,223

Net debt1

2,052

2,442
  1. These metrics are non-IFRS measures that the Directors use internally to assess the financial performance of the Group, which are also relevant to users of the financial information. See glossary for definitions. 
  2. Includes operations during the period prior to commercial production for the first half of 2017.
  3. Reconciliation to operating profit provided in note 4(a)(i) in the financial information. 
  4. Reconciliation of EPS based on Underlying Profit provided in note 7 in the financial information.
  5. Reconciliation of Free Cash Flow provided on page 20.

KAZ Minerals has delivered strong financial results in the first half of the year due to the ramp up of volumes at Aktogay, higher commodity prices and continued low unit production costs. Following the successful delivery of the Bozshakol and Aktogay projects, the Group now has a portfolio of large scale, low cost operations which provides strong cash generation and has enabled the rapid de-gearing of the balance sheet. Accordingly, the Board has declared an interim dividend of 6.0 US cents per share.

PLEASE FOLLOW THE LINK TO DOWNLOAD THE FULL ANNOUNCEMENT