ENRC Expects Revenue to Decline Mainly on Lower Iron Ore Prices - CFO

By Alex MacDonald

LONDON--Kazakhstan-focused Eurasian Natural Resources PLC (ENRC.LN) expects its revenue to decline in the second half of the year compared with the first half, largely due to falling iron ore prices, the company's chief financial officer said Wednesday.

"Starting from the second quarter of this year, iron ore prices are slowing down. And obviously in the second half of this year, we expect our revenue to be lower than in the first half" largely due to iron ore prices, Zaure Zaurbekova told Dow Jones Newswires.

Jim Cochrane, chief commercial officer, echoed that view in a call with analysts, saying that given "the general economic situation, we are not expecting prices to recover much during the year...We have to be used to maintaining a lower level of prices."

He added that if the spot price for iron ore delivered into China fails to recover from the current low level of around $115 a metric ton, it will have a direct impact on the company's financial results. He said that the spot iron ore price was about 20% higher during the first half of the year at around $140/ton.

Prices of iron ore and ferrochrome, two key contributors to ENRC's earnings, have both fallen due to oversupply amid slower economic growth in China, the world's largest consumer of such commodities, and the impact of the euro-zone's sovereign-debt crisis on its economy and elsewhere.

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