In the six-month period to June 30, pre-tax profits tumbled 63pc to $751m (£454m) on revenues 50pc lower at $1.7bn.
Commodity prices and demand for metals plunged over the last year as global trade was hit by the financial crisis.
Eurasian Natural Resources Corp (ENRC) is a major producer of ferrochrome, a constituent of stainless steel, and demand for the alloy from China was strong.
Johannes Sittard, the company’s chief executive, told The Daily Telegraph that he believed that strength in Chinese ferrochrome imports was not down to restocking, but reflected “actual consumption”.
The company halved its interim dividend to 6p from 12p, but this is in line with its dividend policy of paying out 15pc – 20pc of earnings. However, the 6p pay-out represents 15pc of earnings, so is at the lower end of the group’s targeted range. It will be paid on October 8.
The company continued to make good progress on reducing costs, which fell 31pc in the period. However, when the effects of the devaluation of the Kazakh tenge earlier this year are stripped out, costs fell 17pc. The company said that demand had improved and some of its plants were working close to full capacity. ENRC reached 95pc capacity utilisation in its ferrochrome division in Kazakhstan this month. For iron ore, utilisation now stands at 100pc.
The company has $2m in cash and outstanding debt of $585m, so its balance sheet remains strong.
Mr Sittard said he was aware that there would be opportunities to purchase assets at good valuations in the current environment, so targeted acquisitions are on the cards.
ENRC is 25pc-owned by Kazakh copper producer Kazakhmys, and there has been much speculation regarding a merger of the two groups.
However, Mr Sittard said that there were no plans for a combination and both management teams were working well together.
Source: Daily Telegraph
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