* Helped by tenge currency devaluation
* Average copper prices down about 8 pct from year-ago
* After spin-off to produce 80,000-85,000 tonnes of copper
(Adds details on EBITDA, adds bullet points)
LONDON, Aug 21 Copper producer Kazakhmys
posted a smaller decline than expected in first-half core
profit, as measures it took to control costs and protect margins
partly offset lower copper prices.
Like other copper miners, Kazakhmys is fighting against
rising production costs and falling metal grades, which together
with weaker prices have squeezed margins.
To do so, the Kazakh miner produced less copper in the first
half this year as it reduced output in higher-cost areas to
protect margins and conserve cash.
It also announced earlier this year a break-up of the
company in an attempt to improve its performance, transferring
some of its older and costlier assets to a private company owned
by two of its shareholders.
Group core profit, or earnings before interest, tax,
depreciation and amortisation (EBITDA) came in at $324 million
in the first half this year from $714 million a year earlier but
topped a company-provided analysts' consensus of $282 million.
Last year's EBITDA figure included some assets the company
disposed of: a 26-percent stake in mining firm ENRC, a
50-percent holding in power station Ekibastuz GRES-1 and German
semi-finished copper products business MKM.
It posted a loss before taxation of $118 million, compared
with a $244 million loss a year earlier.
An 8 percent average drop in copper prices in the period and
lower production volumes weighed on the company's bottom line,
but the fall was smaller than analysts had expected.
"The results are ahead of guidance despite the lower copper
price and despite the lower sales volumes, and that's the result
of the optimisation measures we have taken (since) the second
half of 2013 and as we saw the benefit of the tenge devaluation
coming through," Chief Financial Officer Andrew Southam said in
a call with journalists.
Kazakhmys benefited from Kazakhstan's decision to devalue
its currency earlier this year, since around 60 percent of its
cost base is in Kazakh tenge but its output is sold for dollars.
The company is now focusing on completion of the announced
split. Under the plan, it will become an initially smaller but
lower-cost producer, with output of about 80,000-85,000 tonnes
compared with 294,000 tonnes of copper cathode equivalent
produced in total last year.
It then aims to increase its output by 32 percent by 2018
versus 2013, reaching output of about 350,000 tonnes of copper
equivalent as its new projects Bozshakol and Aktogay come on
The miner confirmed its cash costs estimate from the assets
it will retain at 120-140 cents per pound of copper equivalent
from 220 cents for the group last year.
Shareholders voted in favour of the restructuring plan last
week and completion of the split is expected by the end of 2014.
(Reporting by Silvia Antonioli; editing by Jason Neely, Larry