The shares of Kazakhmys (LSE: KAZ ) slumped 45 pence, or 10%, to 399 pence during early London trade this morning after the miner confessed its earnings had dropped 67%.
Kazakhmys, which mines copper at 16 sites throughout Kazakhstan, said post-tax profits had dropped by $1 billion to $492 million. The company blamed lower commodity prices, rising industry costs and lower sales volumes of copper for the shortfall.
The statutory figures were blighted a $2 billion write-off relating to the group's 26% stake in Eurasian Natural Resources, the reported book value of which has now been reduced to $2 billion. The market value of the stake yesterday was $1.3 billion.
The miner's balance sheet also saw a $19 million net cash position transform into net debt of $707 million during the year. Additional borrowings were required to fund capital expenditure that nearly doubled to $1.2bn.
As previously announced, the full-year dividend was chopped from $0.28 to $0.11 per share.
Matthew Hird, the chief financial officer of Kazakhmys, said: "Debt will increase in the next couple of years as we invest in our new projects, but with $4.2 billion of secured long-term funding, we are in an excellent position to continue the delivery of our growth projects. 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."
The shares of Kazakhmys have lost around 75% of their value since the start of 2011. However, the firm's current £2.1 billion market cap is just five times the value of the underlying earnings reported today.
Of course, whether that rating and this morning's results combine to make Kazakhmys a buy remains up to you to decide. However, this share did plunge from £18 to less than £2 during the 2008 banking crash, only to bounce as high as £16 during the 2009/10 recovery.
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