OZ Minerals: Interim result 2013

A note to OZ Minerals: first make profits, then pay dividends. Gaurav Sodhi explains why a net loss was made worse by an unsustainable dividend.

OZ Minerals has reported a disappointing half-year result as falling commodity prices and lower grade output take their toll. Revenue fell 39% to $316m and, after an asset writedown of $232m, the company reported a net loss of $268m, compared to a net profit of $120m last year. Even on an underlying basis – without the impact of the writedown – OZ still generated a net loss of $36m.

Despite the woeful performance, management kept with fashion and declared a dividend of 10 cents per share (unfranked, ex date 5 Sep).

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