Adverse weather hits ENRC's first quarter iron ore production

Severe winter weather hit first quarter production at FTSE 100-listed diversified natural resources group Eurasian Natural Resources' iron ore division while revenue decreased slightly when compared to the corresponding quarter as a result of weaker commodity prices.

Severe winter weather hit first quarter production at FTSE 100-listed diversified natural resources group Eurasian Natural Resources' iron ore division while revenue decreased slightly when compared to the corresponding quarter as a result of weaker commodity prices.

In an interim management statement and production report for the first quarter ended March 31st, the global mining company reported that production had been at full capacity in all but two business divisions. In addition to the iron ore division, it said that the Shubarkol division experienced a decrease in line with seasonal demand.

Overall gross ferrochrome production decreased by 3.4% compared to the first quarter of 2012, with a 2.1% decrease in high-carbon ferrochrome. The decrease was mainly caused by planned maintenance at Aksu plant, the group said.

Iron ore extraction and primary concentrate production decreased by 9.2% and 12.1% respectively, against the comparable period in 2012. Saleable concentrate production decreased 24.2% and saleable pellet production increased 0.7% against the first quarter of 2012, with total saleable product decreasing 12.2%.

Bauxite extraction and alumina production increased 1.0% and 24.8% respectively, against the first quarter of 2012 while aluminium production decreased 1.6% on the first quarter last year.

Production of saleable copper in the first quarter of 2013 was 14,536 tonnes, a 61.7% increase due to the inclusion of Frontier and a 7.0% increase on a like-for-like basis versus the same period in 2012.

Year-on-year, coal extraction by EEC decreased by 0.7% during the quarter. Electricity generation decreased 1.3% compared to the first quarter of 2012. Shubarkol coal extraction decreased 34.1% and special coke production by 7.5% against the fourth quarter of 2012 following the seasonal trend.

The group had gross available funds at March 31st of $0.8bn and net debt was $5.5bn. In February 2013, the group refinanced its existing revolving credit facility, increasing the facility from $467m to $500m and extending the maturity to 2015.

Felix Vulis, Chief Executive Officer of ENRC, said: "I am pleased with the group's recent operational performance, which is a reminder of the underlying strength of the business. The ferroalloys division produced at full available capacity, volumes were included for the full quarter from Shubarkol and alumina production has recovered well."

He added: "Our focused capital expenditure plan is starting to reap rewards, with concentrate having been produced from Frontier during the first quarter and the Frontier processing plant fully commissioned in April. Unfortunately Kazakhstan experienced severe winter weather conditions which impacted our ability to mine iron ore during January.

"However, by selling down inventories we managed on the whole to maintain sales to our customers over this period. As a management team our focus continues to be on the development of our key growth projects, management of cost inflation and maximising production volumes from our world class asset base."

MF

Recommended

Britain’s ten most-hated shares – w/e 20 May
Stocks and shares

Britain’s ten most-hated shares – w/e 20 May

Rupert Hargreaves looks at Britain's ten-most hated shares, and what short-sellers are looking right now.
23 May 2022
Britain's most-bought shares w/e 20 May
Stocks and shares

Britain's most-bought shares w/e 20 May

A look at Britain's most-bought shares in the week ending 13 May, providing an insight into how investors are thinking and where opportunities may lie…
23 May 2022
Director dealings w/e 20 May: what company insiders are buying and selling
Stocks and shares

Director dealings w/e 20 May: what company insiders are buying and selling

Directors’ share dealings can often give investors an insight into the sentiment of company insiders. Here are some of the biggest deals by company di…
23 May 2022
Three high-yielding FTSE 250 dividend stocks I’d invest in right now
Share tips

Three high-yielding FTSE 250 dividend stocks I’d invest in right now

The average FTSE 250 dividend yield is around 2.4%., but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income inve…
23 May 2022

Most Popular

Imperial Brands has an 8.3% yield – but what’s the catch?
Share tips

Imperial Brands has an 8.3% yield – but what’s the catch?

Tobacco company Imperial Brands boasts an impressive dividend yield, and the shares look cheap. But investors should beware, says Rupert Hargreaves. H…
20 May 2022
Barry Norris: we’re already in the 1970s. Here’s how to invest
Investment strategy

Barry Norris: we’re already in the 1970s. Here’s how to invest

Merryn talks to Barry Norris of Argonaut capital about the parallels between now and the 1970s; the transition to “green” energy; and the one sector w…
19 May 2022
Share tips of the week – 20 May
Share tips

Share tips of the week – 20 May

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
20 May 2022