LONDON -- Profits at Kazakh natural-resources group Eurasian Natural Resources (LSE: ENRC.L) fell 60% in the first six months of 2012 compared with the same period last year, down to $463 million from $1.2 billion in H1 2011.
ENRC makes most of its money from mining, and shares in the sector have all fallen this year, in no small part due to weakening demand from China, which has knocked commodity prices right down. Indeed, following the news this morning, shares in ENRC have fallen more than 7% at the time of writing -- and they look like they're heading further south.
Management blamed a decline in commodity prices and a challenging economic environment in its half-year results, while increased inflation, depreciation, and wage rates were highlighted as reasons for a 4% rise in cost of sales.
CEO Felix J. Vulis commented, "In the light of these market conditions we have concentrated on controlling our costs and enhancing productivity, with unit cost inflation falling well below our earlier guidance."
Last week, Fool contributor Roland Head pointed out that ENRC's price-to-earnings ratio was 4.4 -- one of the lowest in the FTSE 100. However, he warned of "corporate governance concerns" in Kazakhstan and admitted he was not tempted by the company.
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