PERTH (miningweekly.com) – Copper miner Oz Minerals has nearly halved its net profits after tax for the full year ending December, with the miner reporting that net profits fell to A$163.9-million from the A$222.4-million reported in the previous full year.

Underlying net profits after tax declined from A$228.3-million to A$163.9-million, while underlying earnings before interest, taxes, depreciation and amortization declined from A$540.4-million to A$462.4-million.

The miner said on Tuesday that the lower reported net profits after tax resulted from lower copper sales, as the Prominent Hill mine transitioned from its higher copper grade openpit stockpiles.

Profits were also impacted by A$24-million worth of realised losses on gold hedges and increased corporate costs on higher insurance and restructuring costs, and a full year amortization charge relating to intellectual property technology.

Gross revenue for the full year reached A$1.17-billion, down by A$17-million on the previous financial year, resulting from lower copper sales. However, Oz Minerals noted that the lower sales volumes were offset by the higher Australian dollar realised copper and gold prices, which were 2% and 12% higher respectively.

“Prominent Hill delivered a fifth consecutive year of meeting or exceeding copper production guidance. Its performance and cash flow have enabled us to build Carrapateena, which produced first saleable concentrate at the end of 2019; invest significantly in our growth pipeline; and deliver a net profit after tax of A$164-million on net revenue of A$1.1-billion,” said Oz Minerals CEO Andrew Cole.

“Operating cash flows were again strong at A$511-million and we ended 2019 with a net cash balance of A$134-million and our working capital facility of A$300-million in place. We are well positioned to advance our quality growth pipeline during 2020 while our new assets ramp up to full production.”

Cole noted that 2020 would be a transition year for Oz Minerals, with the company’s focus being on the ramp-up of the Carrapateena mine, and maintaining production and cost performance at Prominent Hill, as expansion studies reached significant milestones.

“Pedra Branca is expected to produce first development ore mid-year, providing a further element of our strategy of creating a reliable and consistent hub structured production base out of Carajas, and we continue to work closely with regional authorities on the removal of the injunction at CentroGold to enable a resumption of regional exploration and commencement of the feasibility study to advance the prefeasibility completed on the mineral resource and ore reserve in 2019,” he added.

“With a number of quality growth options likely to progress through their stage gates during 2020, we will apply our disciplined capital management strategy and allocation framework to ensure we prioritise and focus our efforts to create maximum value for shareholders and our other stakeholders while remaining within our conservative gearing limits.”