Kazakhstan-based mining company Eurasian Natural Resources Corp. Plc (ENRC.L) Wednesday reported a sharp increase in profit for full year 2010, as revenues grew 72 percent, reflecting continued recovery of commodity prices and market demand. The company also said it remains positive on its prospects for 2011.
For the full year, the company's profit before tax more than doubled to $2.98 billion from $1.44 billion in the previous year.
Profit for the year attributable to equity holders was $2.19 billion or 170 cents per share, up from $1.05 billion or 81 cents per share reported last year.
The company noted that earnings include a one-off gain related to accounting for Brazilian acquisition of Bahia Minerals BV in September of $298 million and acquisition related costs of $73 million.
Revenues for the year grew 72.4 percent to $6.61 billion from $3.83 billion in the prior year, helped by significantly higher sales volumes and improved prices. Like-for-like revenue were up 62 percent from last year.
The company said its Ferroalloys division accounted for 45.2 percent of revenue, the Iron Ore division accounted for 28.4 percent and Alumina and Aluminium Division accounted for 13.7 percent.
Gross margin improved significantly during the year to 56.9 percent from 49.2 percent in the preceding year, due to significant increase in the selling prices, which was partially offset by increased taxes and costs of raw materials.
Felix Vulis, Chief Executive Officer of the company said, "The Group's strong performance in 2010 was built on the solid foundations of the businesses in Kazakhstan which delivered record production in the year. China's economic growth and our strategic location remained key, while we also saw recovery in our traditional markets."
For the year, capital expenditure was $1.19 billion, compared to $1.15 billion in the previous year. In 2011 capex spend is expected to be about $2.5 billion.
For fiscal 2011, the company's capex programme is increased to an estimated $11.1 billion, with new amounts planned for Other Non-ferrous, Energy and Logistics Divisions.
In addition, the board recommended a final dividend of 18 cents per share, to shareholders of record on April 1, 2011, payable on June 15.
"We made further progress with our growth strategy by establishing the foundations for growing businesses in Africa and Brazil, with major benefits to be realized in the years ahead," added Vulis.
ENRC.L is currently trading at 901 pence, up 2.5 pence or 0.28 percent, on a volume of 154 thousand shares.
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