09 May 2007
ANNUAL GENERAL MEETING Statement
9th May 2007
2006 was the first full financial year for Kazakhmys as a UK listed company,
with the company producing a solid operational performance and a good set of
Our overall production of copper cathode rose 5% to 405 kt, whilst production of
copper cathode from own concentrate rose 9% to 368 kt. We also saw improved
performances across our major by-products.
The 2006 financial results showed continued improvement in profitability. Profit
before tax increased by 156% to $2,168 million. Basic earnings per share were up
132% at $2.99 and EBITDA excluding special items reached a record $2.3 billion.
On the corporate governance front, we have made significant changes to the
composition of the Board since the last annual general meeting, with the
appointments of Oleg Novachuk as our new Chief Executive, and Simon Heale and
Phil Aiken as new non-executive directors. We have also appointed Eduard Ogay as
our new Chief Executive Officer of Kazakhmys Corporation LLC and Matthew Hird as
Chief Financial Officer to take over Oleg's previous role. As a result of these
changes, we now comply with the requirements of the Combined Code to the fullest
possible extent save that Mr. Kim was not independent at the time of his
appointment and we are delighted that these changes have met with a positive
response from our major shareholders.
At the beginning of this year, we took a first step in delivering on our
strategy of diversification, with the acquisition of the East Akzhar petroleum
field, an exploration block in western Kazakhstan. The independent Directors are
considering the exercise of a call option over an 18.8% economic interest in the
underlying assets of Eurasia Natural Resources group's metals and mining
business. Beyond these two projects, there is more we plan to do so as to
further diversify our asset base and we continue to review other investment
opportunities in Kazakhstan and the neighbouring regions.
Our safety performance has not yet reached a satisfactory level with 32
fatalities last year. The Company has provided all possible support to the
families of the deceased. The Board, on the recommendation of the Health, Safety
and Environment Committee under the leadership of David Munro, is taking steps
that should improve the Company's performance in this important area.
In summary, since the last annual general meeting Kazakhmys has enhanced its
trading platform and corporate governance framework and demonstrated its strong
cash generation ability, leaving the company well placed for future growth.
The Board of directors has therefore recommended a final dividend of 25.7 US
cents per share, making the total dividend for the year 38.5 US cents per a
share, a year-on-year increase of 7% on a comparable post-listing basis.
At the end of the year, Mr YK Cha stood down as Chief Executive on 31 December
2006. The executive management and the Board would like to express sincere
gratitude to him for his contribution to the development of Kazakhmys into a
FTSE 100 mining company. The group now employs over 64,000 people working hard
to achieve success for Kazakhmys. The rewarding year we had last year is a
creditable reflection of the efforts and commitment of all these people.
Our interim results will be issued in September 2007 when we will inform
shareholders on performance trends in the first half of this financial year. We
see no need to change the sentiment expressed in the chairman's statement that
the global economic outlook for 2007 remains positive, supported by anticipated
growth coming from Asia, particularly India and China, with the Board expecting
demand for metal products to remain at historically high levels over the next
With regard to our production outlook for 2007, we would like to reiterate the
statement expressed in our Q1 production report issued last week, in that we
expect copper cathode production from both own and purchased concentrate to be
at slightly higher levels than reported for 2006, with by-product volumes being
in line with last year's levels.
In conclusion, we are confident that 2007 will be another successful year for
For further information please contact:
Jinsoo Yang, Head of Investor Relations
Sergei Stephantsov, Deputy Head of Investor Relations
Tel:+44 20 7901 7800
Tel:+44 20 7251 3801
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Notes to Editors
The principal business of Kazakhmys plc ("the Group") is the mining, processing,
smelting, refining of copper and copper products, including copper cathode and
copper rod. The Group's operations are vertically integrated. Kazakhmys operates
19 open pit and underground mines and two smelting and refining complexes in the
Republic of Kazakhstan. Kazakhmys also owns significant rail infrastructure in
Kazakhstan and MKM, a copper products fabrication company in Germany.
This information is provided by RNS
The company news service from the London Stock Exchange