Mark to market adjustments also hurt the Australian and Laos-based miner which reported its net profit after tax for the six months to June 30, 2007, of $173.45 million, down from the previous year's $263.23 million.
Oxiana said the mark to market price adjustments occurred over zinc shipments and lower gold sales, partially offset by higher average zinc price and higher sales volumes of zinc and copper concentrates.
Another impact on Oxiana's net profit was the increase in the Lao tax rate, which climbed up from the previous year's 16.7% to 33.3%
Earnings before interest, tax, depreciation and amortisation (EBITDA) was down from $401.45 million to $334.6 million while revenue was down 2.6% down $599.6 million to $584.16 million.
"In total, mark to market pricing adjustments and the effect of the stronger Austrlaian dollar reduced EBITDA by $128.4 million and [net profit after tax] by $101.4 million," Oxiana said.
"Normalising for these effects, Oxiana's underlying financial performance was ahead of the first half of 2006."
Despite the falls, managing director Owen Hegarty was upbeat when speaking to journalists via a conference call, announcing the company has $502.3 million cash at hand and will pay shareholders a fully franked interim dividend of 4c per share, a 33% increase from the previous year.
Hegarty said the drop to Oxiana's bottom line was due to a higher Australian dollar exchange rate which averaged 81c compared to last year's 74c which negatively affected translation of sales revenue for Golden Grove and Sepon's operating income.
Copper revenue from its Sepon operation in Laos was down 15% to $236.2 million, while gold bullion revenue dipped 28% to $49.5 million.
The average gold price over the first half of 2007 was $US657 per ounce compared to last year's $596/oz.
Golden Grove saw its revenue increase from $253.6 million to $298.5 million.
Although markets were in a freefall last week and continue to be volatile, Hegarty remains optimistic about the future with world copper demand to grow at around 5%, while China will grow at an increased rate of 15%, which in turn will boost European and US copper premiums.
"Production remains pretty well as forecast for the balance of this year," Hegarty said.
Oxiana has forecast copper production at Sepong to be between 60,000-63,000t and 10,000oz gold.
Golden Grove is forecast to produce between 140,000 to 150,000t of zinc, 12,000-15,000t of copper and 50,000-55,000oz of gold.
"We're in very good shape I can assure you with terrific ability and capacity to continue to fund all of those development projects that we have or discover or acquire," Hegarty said.
Shares in the miner climbed 11c or 3.3% to $3.40 in early afternoon trading today.
