Copper and gold miner OZ Minerals remains on the hunt for acquisitions and has booked a 72 per cent slump in first half profit after spending $60 million settling a class action.
Shares in the cashed-up miner lost 45 cents, or 3.64 per cent, to $11.90.
Net profit of $113.9 million for the six months to June 30, compared to $405.7 million for the prior corresponding period.
The variance was largely due to the class action litigation settlement, a $32.7 million foreign exchange loss and a $15.2 million drop in value of its investment in uranium explorer Toro Energy.
Under two separate class actions conducted by law firms Slater & Gordon and Maurice Blackburn, it was alleged investors bought shares in OZ Minerals in 2008 when the company had understated its debt by about $300 million.
It was alleged OZ Minerals had failed to disclose the full extent of its refinancing difficulties amid the global financial crisis.
Underlying profit after tax, which reflects the company’s operational performance as it excludes one-off charges, amounted to $189.1 million, against $230.5 million for the first half of 2010.
OZ Minerals said record prices for copper and gold in the first half drove revenue 7.3 per cent higher to $632.7 million.
“The focus remains on maximising copper production levels as revenue generated from the treatment of copper ore is approximately five times that generated from the treatment of gold ore at current commodity prices,” the miner said in a statement on Tuesday.
Chief executive Terry Burgess said the company, which last week witnessed a 12 per cent movement in its share price amid unprecedented market volatility, continued to eye acquisition targets.
“The volatility was so rapid, it was very difficult to spot who was a wounded bird and who wasn’t,” he told a teleconference.
“We need to have a sustained period (of market downturn) where we can work out who’s wounded and who’s not.
“Certainly, this is the sort of thing where cash becomes more important to us if people’s share prices fall.”
OZ Minerals says it has $750 million in cash available for growth opportunities.
The company continues to review its gold asset in Cambodia, where exploration so far has not encountered any significant mineralisation.
Mr Burgess also said the carbon tax would cost the miner between $7 million and $10 million a year through the reduction in the diesel fuel rebate combined with higher electricity costs.
The company declared an interim unfranked dividend of 30 cents per share, on par with the payment made a year earlier.
OZ Minerals on Wednesday will start an on-market share buy-back program of up to $200 million.
