OZ Minerals (ASX:OZL) share price falls despite 150% profit increase in FY21

This miner was on form in FY 2021…

Key points
  • OZ Minerals delivered strong revenue growth in FY 2021 thanks to sky high copper prices
  • The company's profits more than doubled thanks to operating leverage
  • A soft start to FY 2022 appears to have taken some of the shine off the result

The OZ Minerals Limited (ASX: OZL) share price was out of form on Monday following the release of its full year results.

The copper miner's shares ended the day 0.5% lower at $26.03.

Worker in hard hat looks puzzled with one hand on chin

Image source: Getty Images

OZ Minerals share price lower despite explosive growth

  • Net revenue up 56.2% to a record of $2,095.8 million
  • EBITDA jumped 92% to $1,162.4 million
  • Net profit after tax surged 150% to $530.7 million
  • Fully franked final dividend of 18 cents per share, bringing its full year dividend to 34 cents per share

What happened during FY 2021?

For the 12 months ended 31 December, OZ Minerals reported a 56% increase in revenue to $2,095.8 million. Management advised that this was driven by a combination of increased sales volumes of copper and gold and high copper prices.

In respect to the latter, the realised $A copper price was 42% higher than the prior corresponding period, while the realised gold price was up 1% year on year.

Whereas OZ Minerals' earnings growth was driven by its strong revenue growth and a robust operating margin of 55%, which reflects its reliable operational and cost performance.

Management commentary

OZ Minerals' Managing Director and Chief Executive Officer, Andrew Cole, said: "The past year saw us deliver net profit of $531 million on record revenue of $2.1 billion. We met our operational targets while continuing to invest in our growth strategy."

However, Mr Coles revealed that 2022 has started off slowly, which may have weighed on the OZ Minerals share price.

He explained: "These results were delivered notwithstanding a more difficult final quarter impacted by COVID related absenteeism which has continued into 2022. When combined with an extreme rain event that affected our South Australian logistics, we are likely to see a slower start to 2022 production, building back in line with full year guidance as the year progresses."

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

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