Central Asia Metals Ups Payout 24% As Record Output Keeps Profit Flat
LONDON (Alliance News) – Central Asia Metals PLC on Tuesday said copper production and sales both hit records in 2016, but said revenue only experienced a minor lift while profit remained broadly flat, although the miner still opted to lift its annual dividend by an impressive 24%.
Central Asia shares were trading up 6.3% on Tuesday morning at 232.20 pence.
The miner operating the Kounrad mine in Kazakhstan said copper production in 2016 rose to 14,020 tonnes from 12,071 tonnes in 2015, while sales rose to 13,938 tonnes from 12,040 tonnes – both hitting records. The driver was the completion of the second phase of expansion which was completed on time and 30% under budget.
Despite higher output, Central Asia’s annual revenue only managed a small rise to USD69.3 million from USD67.3 million in 2015.
The miner did counter pricing pressure by lowering its C1 cash cost to just 43.0 cents per pound of copper, down 28% from 60.0 cents per pound. Overall cost of sales fell to USD18.4 million from USD25.5 million, improving the gross margin to push gross profit up to USD48.3 million from USD38.9 million in 2015.
Operating profit was broadly flat at USD33.0 million, with the major difference in results being a USD1.2 million foreign exchange loss in 2016 versus a USD9.0 million gain in 2015.
Pretax profit for the year was USD32.9 million, only a fraction higher than the 2015 profit of USD32.7 million.
Central Asia Metals said its dividend for the year will be 15.5 pence, up from 12.5 pence the year before.
Cash at the end of the year stood at USD40.4 million, down from USD42.0 million a year earlier. However, the miner remains debt free.
Turning to 2017, production should continue to rise to a range of 13,000 tonnes to 14,000 tonnes, and the miner said leaching from western dumps is anticipated starting this month, while the Shuak exploration programme will begin in the second quarter of 2017.
By Joshua Warner, Alliance News Limited