UPDATE 2-ENRC H1 profit up, sees strong H2, boosts capex

(Adds analyst comment, conference call, shares)

By Eric Onstad

LONDON, Aug 21 (Reuters) - Kazakh miner ENRC's (ENRC.L) half-year profit more than doubled, and it forecast a buoyant second half, boosting shares on Thursday.

Shares in Eurasian Natural Resources Corp, up 68 percent so far this year, climbed 3.7 percent to 1,065 pence, outperforming a 1.6 percent rise in the UK mining index .FTNMX1770.

"The 1H08 result for ENRC was very strong. It beat expectations... and further earnings growth in the 2H08 is a given," Deutsche Bank said in a research note.

The group, the world's largest producer of ferrochrome, unveiled plans to nearly double its capital expenditure pipeline to $6.9 billion to boost output because of confidence in the future of the ferrochrome and iron ore sectors.

"Despite macroeconomic uncertainties, we expect higher commodity prices to hold. We anticipate a very strong performance from the group in the second half of 2008," Chief Executive Johannes Sittard said in a statement.

ENRC said earnings per share before exceptional items surged 160 percent to $1.04 in the first six months of the year, helped by buoyant metal prices and higher output.

The firm, which floated on the London stock exchange in December, proposed a maiden dividend of 12 cents per share.

ENRC said earnings before interest, tax, depreciation, amortisation and exceptional items rose 170 percent to $2.15 billion on 86 percent higher revenue of $3.44 billion.

The underlying cost of sales increased 15 percent, lower than inflation in Kazakhstan of 20 percent.

"Although we achieved a good control of costs in the first half, we expect cost pressures to prevail through the second half of 2008 and into 2009," Sittard said.

Chief Financial Officer Miguel Parry told a conference call that the group was sticking with guidance that full-year costs may rise by up to 20 percent.

CAPEX UP, MORE TAKEOVERS

ENRC, which completed two takeovers and agreed a third one in the first half, said it would push forward with its expansion programme, through both organic growth and acquisitions.