Oz Minerals (ASX:OZL) share price hits 13-year high as profit jumps 30%

The OZ Minerals Limited (ASX: OZL) share price outperformed this morning after it posted a 30% increase in net profit.
The post Oz Minerals (ASX:OZL) share price hits 13-year high as profit jumps 30% appeared first on The Motley Fool Australia. –

Mining shares Oz Minerals share price profit results

The OZ Minerals Limited (ASX: OZL) share price outperformed this morning after it posted a 30% increase in net profit.

The Oz Minerals share price jumped 0.6% to a 13-year high of $21.75 when the S&P/ASX 200 Index (Index:^AXJO) struggled at breakeven at the time of writing.

The copper miner’s gains stand in contrast to the mining sector, which is trading in the red. The Sandfire Resources Ltd (ASX: SFR) share price lost 0.8% to $5.25 while the BHP Group Ltd (ASX: BHP) share price shed 0.5% to $48.35.

Oz Mineral’s reports higher profits and sales

Oz Minerals reported a $48.7 million increase in its FY20 underlying net profit to $212.6 million as group revenue improved 21.2% to $1.34 billion. The miner’s financial year is the same as the calendar year.

The miner’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) also jumped by 31.1% to $606.3 million.

Gold to take more credit than copper

It wasn’t so much copper that allowed management to deliver the improved result. It was gold.

Gold is a by-product of copper mining and is sold to recoup costs. The net Australian-dollar gold price rose by 20% during the year compared to an 11% increase in the copper price.

What’s more, Oz Minerals managed to sell more gold in 2020 than the year before, but the same can’t be said about copper.

“Copper sales were lower following the depletion of high-grade copper ore stockpiles and the prioritisation of processing high-grade gold stockpiles at Prominent Hill,” said the miner in its ASX statement.

“However, this was partially offset by the first year of production at Carrapateen.”

Copper could outdo gold in 2021

No doubt, it’s the gold credits that helped Oz Minerals achieve an enviable 45% operating margin and lifted operating cash flows by 8% to $550 million.

But copper may soon be playing catchup at a time when gold’s bull run seemed to have stalled. The analysts at Citigroup are forecasting copper to hit US$10,000 a tonne in 2021-22 as the world decarbonises.

The rise of electric vehicles and renewable energy sources require a lot of copper, according to the broker. Under its “bull case” scenario, copper could even hit US$12,000 a tonne compared to its current price of around US$8,400 a tonne.

Oz Minerals’ outlook

“2021 will be a year where OZ Minerals will move into our next phase of growth with major growth catalysts at all of our assets,” said the miner’s chief executive Andrew Cole.

“The focus will be on safe operational delivery, on starting early works on the Carrapateena block cave following Board approval, advancing the project studies at Prominent Hill, Carrapateena and West Musgrave, and developing out the Carajás Hub strategy in Brazil. 

We’ll also be continuing our exploration activities where possible.”

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and OZ Minerals Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Oz Minerals (ASX:OZL) share price hits 13-year high as profit jumps 30% appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!