Through recent acquisitions, miner Eurasian Natural Resources Corporation (ENRC) is diversifying away from its core steel-related commodities and expanding operations beyond Kazakhstan. The (£628m) brings copper and cobalt operations in Africa and development projects in other commodities, while the acquisition of Zambian copper and cobalt producer, Chambishi Metals, is expected to complete by June.
By maintaining its workforce, ENRC was able to restore production fairly quickly when demand picked up in the second half, after the slow start to the year. The recovery allowed overall production volumes to remain broadly at 2008's levels for ferroalloys and iron ore; aluminium production remained steady at its capacity rate.
Still, profits fell sharply after significantly lower commodity prices offset both cost savings and a $210m gain on the devaluation of the Kazakhstan tenge. China accounted for much of 2009's recovery and, looking forward, management sees prospects for sustained growth from China and other emerging markets. ENRC was also able to exploit its proximity to China to minimise costs, although these are expected to rise this year.
The group continues to seek acquisitions and would consider borrowing to fund attractive opportunities. Prior to these results, Credit Suisse was forecasting 2010 EPS of 169¢.
| EURASIAN NATURAL RESOURCES CORPORATION (ENRC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,185p | MARKET VALUE: | £15.3bn | |
| TOUCH: | 1,184-1,186p | 12-MONTH HIGH: | 1,225p | LOW: 403p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 599¢ | NET CASH: | $402m | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2006 | 3.26 | 0.97 | 55 | nil |
| 2007 | 4.11 | 1.32 | 79 | nil |
| 2008 | 6.82 | 3.83 | 205 | 31.0 |
| 2009 | 3.83 | 1.44 | 81 | 12.0 |
| % change | -44 | -62 | -60 | -61 |
Ex-div: 31 Mar Payment: 16 Jun £1=$1.483 | ||||
