Kazakhstan-based mining group Eurasian Natural Resources Corporation Plc. (ENRC) has announced its operational results for the first half of 2009.
Accordingly, in H1 2009, ENRC's total ferroalloy production went down by 28.4 percent year on year to 585,000 mt, its ferrochrome output decreased by 24.5 percent to 478,000 mt, its iron ore extraction dropped by 28.2 percent to 14.985 million mt, and its primary iron ore concentrate production decreased by 26.7 percent to 6.252 million mt, all compared to H1 2008.
Reflecting the first quarter cutbacks of 30 percent for the company's ferrochrome production and of 35 percent for its primary iron ore concentrate, initiated in response to significantly reduced customer demand and in an effort to avoid inventory build up, in Q2 2009 ENRC's production volumes in its ferroalloys and iron ore divisions have decreased compared to Q2 2008. However, in a sign of recovery, in Q2 2009, ENRC's production was up versus the first quarter at its key ferroalloy and iron ore divisions production with ferrochrome production 35.8 percent higher than in the first three months of the year and iron ore pellet output up by 63.5 percent quarter on quarter.
Due to the reduced demand for commodities, and pressure on prices, in H1 2009, ENRC's revenue amounted to $1.695 billion - down 50.8 percent, its underlying EBITDA totaled $628 million - down 70.8 percent, while its profit before tax amounted to $751 million - down 63.3 percent, all compared to H1 2008. However, the company stated that the drop was smaller than expected, and predicted a further recovery in the second half of the current year thanks to the demand from China.
"Our first-half financial and operational performance, in the face of considerable market pressures, reflected a satisfactory outcome. The group was positioned effectively to capture the upturn, and particularly the opportunity offered by China, and this has allowed a rapid recovery in production levels. Into the second-half we believe that the recovery will be sustained. Additionally, we continue to pursue value-enhancing capex and acquisition opportunities, underpinned by our strong balance sheet," ENRC's CEO Johannes Sittard said in a statement.