The OZ Minerals Limited (ASX: OZL) share price is down by 2% so far today after the company provided the market with a business update in light of the escalating coronavirus pandemic.
No significant impact on shipping schedule so far
Pleasingly, OZ Minerals reported that it hasn't suffered any significant impact on its copper concentrate demand or shipping schedules for 2020 to-date.
The copper miner believes that it is relatively well-positioned to ride out the crisis due to its strong balance sheet and relatively low operations costs.
It also reported that it hasn't made any changes to its full-year production metric guidance, assuming that the current operating conditions continue.
Overall cost reduction
OZ Minerals has undertaken a company-wide business review and consequently, has refocused its strategy to align with the production of low-cost metals while simultaneously focusing on preserving jobs. As part of this strategy, OZ Minerals has decided to defer around $150 million of expenditure in a range of areas in light of the crisis. A number of growth-related activities have also been put on hold. The company has also noted that it has the flexibility to defer expenditure beyond 2021 if required.
The copper miner stated that it is in a relatively strong financial position, remaining net cash positive as at the end of February, and has a $300 million revolving debt facility in place that it can potentially draw upon if required.
OZ Minerals doesn't believe that the South Australian border closures will have a significant impact on its Carrapateena and Prominent Hill operations, as over 85% of the site workforce are based in South Australia. In addition, OZ Minerals' Brazilian workforce is locally based and is not currently being impacted by border closures.
The company also noted that its final fully franked dividend payout for 2019 of 15 cents per share went ahead on March 26 as planned.
Disappointing recent share market performance
OZ Minerals hasn't performed well over the past 12 months. In particular, it has seen a downward trend in its share price since last December, well before the share market crash gained traction in mid-February. Delays and wider concerns of an oversupplied copper market have impacted the company's overall share price performance recently.
In OZ Minerals' most recent quarterly production report, the miner reported better than expected costs while overall production was in-line with its previous guidance. Total copper production across the two major sites hit 109,289 tonnes and gold output was 128,874 ounces for 2019.
