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Interim profit up on prices and Dugald River

MMG Limited (MMG) today reported its interim financial results for the six months ended 30 June 2018.

On stable revenue growth of 9% to US$1,898.8 million, the Company reported net profit after tax of US$188.8 million, including US$124.2 million attributable to equity holders, a US$117.2 million improvement on the first half of 2017.

Net debt was reduced by $642.9 million, as a result of higher commodity prices and a continued focus on free cash generation.

Across all operations, MMG produced over 265,000 tonnes of copper and over 105,000 tonnes of zinc in the first half of 2018 – a 3% growth in production on a copper equivalent basis.

“The successful ramp-up of Dugald River, higher realised commodity prices and our continued focus on group-wide efficiencies have contributed to a good financial result for the first half,” MMG CEO Geoffrey Gao said.

“Since the beginning of the year we have achieved commercial production at Dugald River, further simplified and optimised our asset portfolio by agreeing the sale of Sepon, and continued to focus on reducing debt,” Mr Gao said.

“The ramp up of Dugald River and the achievement of commercial production ahead of schedule has been an outstanding achievement and further demonstrates MMG’s ability to deliver world class assets. Our focus now is on optimising the operation, increasing efficiencies and reducing costs.”

Dugald River is expected to rank within the top 10 zinc mines in the world when fully operational, with annual production of approximately 170,000 tonnes of zinc in zinc concentrate at full ramp-up, plus by-products.

“Cost and efficiency remain an important focus and improvement initiatives will continue across all site, group and support functions during the second half,” Mr Gao said.

MMG anticipates producing 490,000 – 510,000 tonnes of copper and 190,000 – 220,000* tonnes of zinc in 2018, excluding Sepon, with completion of the sale 90% interest in LXML to Chifeng expected in the second half.

For more information, please view MMG’s Interim Results announcement for the six months ended 30 June 2018.

* Production includes 39,717 tonnes of zinc from pre-commercial production volumes at Dugald River.