OZ Minerals profit plummets

OZ Minerals’ first half profit fell 72% following the settlement of a class action.

Despite this, the miner says it is in a strong financial position.

It generated revenues of $632.7 million, with a reported NPAT of $113.9 million.

At 30 June, the miner had a cash balance of $905.6 million, with $750 million available for growth.

OZ managing director Terry Burgess stated that he was “pleased that we have been able to demonstrate today that the company is in a very good position. This half, we have been able to capitalise on a period of strong commodity prices through sound operations at Prominent Hill and our very strong cash flows of $388.3 million for the half have helped facilitate the purchase of the Carrapateena project”.

OZ Minerals explained away the massive drop in profit compared to the previous corresponding period as the result of a class action litigation settlement brought about by shareholders, which saw the miner pay out $60.3 million.

It also highlighted foreign exchange movements (which changed from a gain of $40.8 million in 2010 to a loss of $32.7 million thus year), as well as poor investments as reasons behind the slump.

The miner expected copper and gold to continue to reach record prices.

It brought in $475.6 million in copper sales, and $149.7 million in gold.

Production of copper for the first half of the year was 53 725 tonnes, while gold sat at 86 129 ounces, which has put OZ on track to meet its original production guidance of between 100 000 and 110 000 tonnes of copper.

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