Help Desk -
9958816305, 9810335381
Email
Password

USD 9 billion spending review not negate split - ENRC

Steel News - Published on Fri, 17 Aug 2012

Bloomberg reported that Eurasian Natural Resources Corporation’s review of USD 8.8 billion of planned spending on mine development won’t negate an existing study into splitting up the company that was set up this year to seek ways to fund the expenditure.


Mr Felix Vulis CEO of ENRC said that “The strategy review and capex review go in parallel. One will have an effect on the other that is for sure but it’s not like if we decided to delay the capex that will cancel for example, the split of the company.”

The producer of metals in Kazakhstan reported 60% slump in H1 profit and said it planned to review spending on new developments as commodity prices slide, eroding earnings. The review follows the announcement of a study into spinning off foreign operations to boost funds for expansion.

The company, a producer of ferroalloys, iron ore, aluminum and electricity in Kazakhstan, also owns copper and cobalt assets in Zambia and the Democratic Republic of Congo.

Mr Biraj Borkhataria an analyst at ING Groep NV said that “The company is in a position where it has to review and prioritize capex projects. Investors may start to become nervous with debt rapidly rising and the earnings outlook weakening.”

ENRC said that net debt rose to USD 3.41 billion at the end of the half from USD 972 million at the start of the year while the company reduced its estimated capital spending for the full year to USD 2.4 billion from the previous USD 2.7 billion figure.

Net income dropped to USD 463 million in the half from USD 1.17 billion and sales slid 19% to USD 3.25 billion. Output of saleable ferroalloys, used in steel fell 3.1% to 595,000 tonnes and iron ore extraction shrank. The company declined 8.5% to 379.6 pence by the close in London trading.

ENRC, like larger peers Rio Tinto Group and BHP Billiton Limited faces rising costs and lower prices as growth slows in China, the world’s biggest commodities consumer. The price of iron ore, ENRC’s biggest earner last year, averaged about USD 141 per tonne in the half down 21% on a year earlier.

Source - Bloomberg

(www.steelguru.com)

Posted By : admin on Fri, 17 Aug 2012
Related News from Steel segment