OUTLOOK Kazakhmys FY EBITDA steady as stronger copper prices offset lower output

LONDON, Mar 03, 2008 (Thomson Financial via COMTEX) -- KZMYF | news | PowerRating | PR Charts -- Kazakhmys PLC is expected to post steady full-year results on Thursday as stronger copper prices are offset by higher costs and weaker production.

Earnings before interest, tax, depreciation and amortisation are expected to dip to 2.283 bln usd from 2.297 bln in 2006, while earnings per share are anticipated to be unchanged at 3.00 usd.

Deutsche Bank said the company is benefiting from higher copper prices, the rising value of its investment in Eurasian Natural Resources Corporation PLC and a recent power acquisition.

"However, we look for guidance at the full-year result on a strategy to grow copper production volumes, an area of recent disappointment," it said.

The company, the largest copper producer in Kazakhstan, announced at the end of January that its full-year production fell partly due to flooding at its South Mine in the Zhezkazgan complex and equipment shortages. Full-year copper cathode output fell 6.3 pct to 381,200 tonnes, while production from its own concentrate declined 7.5 pct to 340,900 tonnes.

Analysts are looking for an update on 2008 production targets and the group's acquisition strategy amid the current flurry of merger and acquisition activity in the sector.

Kazakhmys has benefited from its 14.6 pct holding in ENRC after ENRC's shares have almost doubled since it listed last December. ENRC, the world's largest producer of ferrochrome by chrome content, is poised to jump into the FTSE-100 in the next reshuffle at the end of this month.

Investors will also be looking for any update on the company's talks to sell a share in its newly acquired Ekibastuz coal-fired power plant, the biggest in Kazakhstan, to the government.

julie.crust@thomson.com jc/sal

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