China Moly shares rise after interim profit surges 66pc
Shares of China Molybdenum gained 4.8 per cent in early trading on Tuesday after the firm posted a 66 per cent year-on-year rise in interim profit on the back of cost reduction and higher sales volume.
The state-backed firm, the mainland’s second-largest producer of the steel-toughening material, reported on Monday night a net profit of 1 billion yuan (HK$1.26 billion) for the year’s first six months.
Earnings surged although the average market selling prices of the firm’s main products – molybdenum, tungsten, copper and gold – have fallen between 8 per cent and 16 per cent year on year.
The profit rise “was mainly due to consolidation of the Australian copper business into the financial statement, sustained efforts made to reduce costs and investment gains from disposal of Kunyu Mining,” Henan province-based China Molybdenum said in a filling with Hong Kong’s stock exchange.
Sales of the firm’s molybdenum products grew 19 per cent year on year to 9.87 million tonnes. The cash production cost fell 7.5 per cent to 56,805 yuan per tonne.
The firm booked 22,025 tonnes of copper sales in the first half, as against none in the year-earlier period.
It booked a gain of 61.2 million yuan from the sale in April of a 70 per cent stake sale in Luoyang Kunyu Mining to Zijin Mining for 700 million yuan.
The firm said it expects the domestic price of molybdenum concentrates to fall in the second half on increased supply, while that of the processed product ferro-molybdenum might rise on tight supply as small miners are forced to shut down by environmental regulations.
The first-half market price of concentrates fell 13.5 per cent year on year, and that of ferro-molybdenum slid 12.6 per cent.