Kazakhmys, the copper miner, unveiled 146 per cent growth in annual profits in its maiden full year results today.

Pre-tax profit for the year ended December 31 soared to $2.17 billion (£1.1 billion) on revenues were up 94 per cent at $5 billion.

The $2.17 billion (£1.1 billion) profit figure was buoyed by higher output and an 85 per cent rise in copper prices, compared with a year earlier.

Copper accounts for 80 per cent of Kazahmys's sales.

BACKGROUND

• Former Kazakhmys boss gets £250m

• Higher costs hit Kazakhmys

• Kazakhmys's departing chief sells shares for nearly £500m

• Kazakhmys hit by resignation

Kazakhmys is not for the faint-hearted

Far from being the ideal widows and orphans stock, it is developing in ways that calm the nerves.

Related Internet Links

• Kazakhmys company information

• Kazakhmys share price chart

• Kazakhmys forecast

For 2007 the company said that it expected prices to remain bouyant and production to increase.

Copper prices hit a record $8,800 a tonne in May, driven by demand from China and speculative interest in the commodities markets.

The market has since eased to about $6,500 a tonne.

However, concerns over labour costs in Khazakstan initially spooked investors. Shares in Kazahmys were 3p lower in early trading at 1,085p, bucking a positive market in which the FTSE 100 index was up 91.8 points at 6,092.5.

Cazenove, the broker said in a note: “These are mixed results but overall slightly disappointing ... Inflationary pressures, especially labour costs, appear to be rising significantly. The company saw significant increases in almost every element of their cost base.”

Kazakhmys added that it would use the cash flows generated by historically high copper prices to acquire other assets in Kazakhstan and neighbouring regions in an effort to diversify.

Net cash flow nearly trebled, rising to $1.33 billion, in 2006.

At the beginning of the month the company announced that it would acquire the East Akzhar petroleum field, an exploration block in western Kazakhstan, its first move into oil.

The company has been granted a call option for the 25 per cent stake in ENRC Kazakhstan Holding, the holding company for Eurasia Natural Resources group's metals and mining business.

The stake is owned by Vladimir Kim, the Kazakhmys executive chairman.

This year Kazakhmys had passed on the opportunity to buy the holding itself, asserting that due diligence would take too long.

Kazahmys proposed a final dividend of $0.257 a share, resulting in a 7 per cent increase in the full year dividend to $0.385 a share on a comparable post-listing basis.

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