27/08/2009 - 09:50

OZ Mins share price hit after heavy loss

27/08/2009 - 09:50

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Shares in diversified miner OZ Minerals have fallen almost five per cent this morning after posting a heavy first half loss, following the sale of many of its assets and a lower copper price, but says it is in a strong financial position.

Shares in diversified miner OZ Minerals fell more than six per cent today after posting a heavy first half loss, following the sale of many of its assets and a lower copper price, but says it is in a strong financial position.

OZ Minerals reported a loss in the first half of fiscal 2009 of $585.6 million, compared with a loss of $500,000 in the prior corresponding period.

Revenue was $854.5 million, compared with $529.3 million in the first half of fiscal 2008.

OZ Minerals did not declare an interim dividend for the half year.

The result follows OZ Minerals sale of many of its assets to China's Minmetals, in a deal that allowed it to pay back debt and focus activities around its flagship mine at Prominent Hill in South Australia.

OZ Minerals' interim report on Thursday was its first major results announcement since the deal went through.

"Overall, the group recorded a net loss of $580.7 million primarily due to a $553.9 [million] loss on the sale of assets, together with lower revenue from operations and costs associated with the refinancing and asset sales transactions," the company said.

Shares in the company closed down 6.09 per cent, or seven cents, finishing at $1.08.

OZ Minerals said most of its revenue in the half came from copper and zinc, with prices for both metals plunging in the wake of the global commodity collapse.

"While commodity prices improved throughout the period, copper prices were on average 50 per cent lower than the same period last year," the company said.

"Similarly, zinc prices were on average 42 per cent lower than the same period last year."

It said revenue going forward will be influenced mainly by the price of copper and, to a lesser extent, gold.

"The outlook for the price of copper is considered to be the most attractive of all base metals," OZ Minerals said.

The Prominent Hill Mine realised a net profit before tax of $19.4 million for the financial period since operations formally began on May 1, 2009, to 30 June 2009.

OZ Minerals' asset sell-off and debt retirement left the company with about $US800 million ($A980.93 million) in the bank, the company said in a quarterly update released to the market last month.

In its half year results released on Thursday, OZ Minerals said it had cash of about $1 billion at June 30, with debts of about $US105 million ($A125.8 million).

"OZ Minerals ended the half year to 30 June 2009 in a strong financial position," the company said.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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