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Oz Minerals half-yearly profit down 43pc

Business

Copper and gold producer Oz Minerals’ half-year profit has fallen by 43 per cent amid lower prices and the costs associated with legal action against the company.

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The SA-headquartered company’s net profit for the six months to June 30 fell to $29.5 million, from $51.8 million a year earlier. But underlying profit was up to $55 million, from $51.8 million.

The statutory result was pulled back by $25.5 million in legal costs associated with the settlement of a class action filed by former Zinifex shareholders who received shares in Oz Minerals following the merger between Oxiana and Zinifex in 2008.

The company maintained its full-year guidance for contained copper production at 115,000-125,000 tonnes.

Oz Minerals owns and operates the Prominent Hill copper-gold mine in South Australia and the Carrapateena Project, one of Australia’s largest undeveloped copper deposits in South Australia.

“We expect 2016 to be another strong year of production, with increasing high-grade copper ore from the underground,” OZ Minerals chief executive Andrew Cole said today.

“As a result, the dividend declared today reflects the board’s expectation of strong cashflows through the remainder of 2016 and indeed over the next several years.”

Oz Minerals will pay an unfranked interim dividend of six cents per share.

In the first half, it produced 58,368 tonnes of copper and 57,662 ounces of gold in concentrate.

The company said commodity prices had been volatile in the first half in the face of demand pressure, higher inventories and persistent economic uncertainty.

The average copper price in Australian dollars was 15 per cent lower than the prior corresponding period and down 21 per cent in US dollars.

However, a lift in the gold price partly offset the lower copper price.

Shares in Oz Minerals were one cent higher at $6.28 at 1035 AEST.

Meanwhile, Fairfax Media’s new financial year has got off to a bumpy start, with its prized real estate advertising business, Domain, reporting a sharp slowdown in digital revenue growth.

Domain’s digital revenue was up 10 per cent in the first five weeks of 2016/17, compared with a 53 per cent jump over the same period a year earlier, with Fairfax blaming the slowdown in new listings on the “dampening effect” of the long federal election campaign.

For the year ended June 26, Domain posted a 33 per cent rise in revenue to $296.3 million, driven by a 50 per cent surge in digital underlying earnings.

Fairfax on Wednesday swung to a full-year net loss of $893.5 million, hurt $1 billion in significant items including the recently announced $485 million writedown of its media operations.

That compares with a net profit of $83.2 million a year earlier.

Annual underlying earnings fell 1.4 per cent to $283.3 million as strong gains by Domain were offset by continued print advertising weakness.

Fairfax’s Australian Metro Media division – which publishes the Age, the Australian Financial Review and the Sydney Morning Herald – booked a 45 per cent drop in earnings to $39 million from $70.8 million a year earlier.

The group’s Australian Community Media unit, which houses The Land and the Canberra Times newspapers, posted a 10.4 fall in underlying earnings.

Underlying annual revenue fell 0.6 per cent to $1.83 billion, with Fairfax chief executive Greg Hywood saying the company’s underlying result was “proof that the transformation of Fairfax Media over recent years has succeeded”.

“The stable top-line revenue and EBITA (earnings before interest, tax and amortisation) make it clear that we have reshaped this company into a high-value, broadly-based, digital rich business,” Mr Hywood said.

Fairfax shares were down seven cents, or 6.5 per cent, to 93 cents in a lower Australian market in the first 20 minutes of trade.

-AAP

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