However, a dividend will not be paid as the company moves to reduce its debt.

“The profit after tax, before abnormals, represents a $43 million improvement over last year and was driven by a strong improvement in profit from our operations,” managing director and chief executive David Stewart said.

“However, it is by no means an acceptable outcome and we acknowledge the need for substantial improvement in results and returns to shareholders.”

In a show of confidence the company said it expected to post a dividend for the coming year.

Analysts, who have only just put away their red pens after being forced to chop their 1999-2000 profit forecasts when Pasminco announced a dire profit warning in June, expect a big turnaround in the current financial year as zinc prices strengthen further and the Century zinc-lead mine comes into full production.

The Century mine, 250km north-west of Mount Isa, only became operational in March and has yet to make a significant impact on the company’s bottom line.

But the rosy outlook has failed to woo investors, who remain put off by a major smelter lawsuit hanging over the miner and low returns from huge investments so far.

Pasminco’s shares closed up 1c to 98c today, nearly 50% of the year high of $1.84 but up from a low of 73c in June when it issued its profit warning.