Kazakhmys in a dive after Enrc writedown

Shares in FTSE 100 copper miner Kazakhmys tumbled by more than 7% today after it wrote down the value of its stake in Kazakh miner Enrc by $2.2 billion (£1.4 billion).

The writedown plunged Kazakhmys into a $2.2 billion loss for 2012, down from a $1.6 billion profit the year before, forcing the group to slash its dividend by more than half, from 28 cents a share to 11 cents. The shares fell 33p, or 7.5%, to 410.4p.

Revenues for 2012 were relatively flat at $3.3 billion, down from $3.56 billion the year before as the miner was hit by falling copper prices.

Chief financial officer Matthew Hird said: “Cost management will be a key focus in 2013 as we seek to improve cash flow from our core business and reduce the impact of rising industry costs.”

Kazakhmys is the largest investor in Enrc with a 26% stake. That stake had a market value of $1.54 billion at the end of 2012, compared with $3.3 billion a year earlier.

Last week, Enrc revealed a $1.5 billion charge that pushed it $550 million into the red for 2012, down from a $2.76 billion profit the year before. Its revenues tumbled by 18% to $6.32 billion.

Stripping out the contribution of Enrc to the bottom line, Kazakhmys reported a 31% decline in profits to $1.36 billion for 2012.