Eurasian Natural Resources Corporation (ENRC) will start to see substantial earnings growth next year as the miner's projects begin production, according to Credit Suisse on Thursday.

The Swiss broker also believes that investors' concerns over an imminent equity raising are overdone.

As well, the firm's analysts expect ENRC's earnings in 2014/15 to rise as assets move from development into production and further progress is made on the group's copper growth strategy.

The remarks come a day after the resources giant recorded a loss before tax of $550m, down from a profit of $2.76bn the year before as it took impairment charges and an onerous contract provision totalling $1.54bn.

Some $608m of the impairments were due to a write-down in the value of its aluminium assets which reflected the "deteriorating conditions of the aluminium market and increasing inflationary pressure on key cost items", the company said.

Revenue declined by 18% over the year from $7.71bn to $6.32bn as a result of a "poor pricing environment"

Credit Suisse said concerns over an imminent equity raising to address the company's low free-float were overdone and issued the company's stock an 'outperform' rating and a target price of £4.0.

"We expect leverage to peak in mid-2013 and for the company to move into a positive [free cash flow] position from 2014," the analyst said.

The broker increased its 2013/14 earnings estimate by 8.0% to 10%, mainly due to lower cost assumptions.

RD

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