LONDON (Alliance News) - Central Asia Metals PLC on Monday said it was "sufficiently confident" in its business plan to declare an interim dividend as it posted a fall in pretax profit for its first half, hit by the fall in the copper price, and an exceptional gain in the previous year.
For the half year to end-June the company posted a pretax profit of USD10.1 million, down from USD52.3 million a year before, as revenue fell to USD29.0 million from USD32.2 million. Also in the previous year Central Asia Metals realised an exceptional USD33.0 million gain.
It proposed an interim dividend of 4.50 pence, cut slightly from 5.00 pence in the previous year.
The fall in revenue was as a result of lower world copper prices, which came under pressure during the first half of 2015 over concerns about the slowdown in growth in the Chinese economy and an increasing supply of copper into the market. This resulted in a lower average selling price of USD5,936 per tonne for Central Asia Metals, compared to the USD7,049 per tonne it achieved in the previous year.
Central Asia Metals said concerns appear to have increased during the third quarter, and as at late August, copper prices had declined to close to USD5,000 per tonne.
The company reiterated its lowered full-year production guidance of 12,000 tonnes of copper. It had previously guided for 13,000, but revised this estimate down after its Kounrad copper recovery plant in Kazakhstan was snagged by mechanical problems at the end of June.
"I am pleased to report that our business has remained profitable in the first half of 2015, despite a 16% decrease in the copper price since the beginning of the year. We delivered a solid operational performance, and despite a temporary production disruption in late June, we have increased our production by 7% from the corresponding period. In addition, we delivered the stage 1 expansion of the plant on time and under budget, and we are working towards the stage 2 expansion," said Chief Executive Officer Nick Clarke in a statement.
Shares in Central Asia Metals were down 3.2% at 159.75 pence Monday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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Central Asia Metals (CAML)