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MMG interim financial results for period ending 30 June 2020

MMG Limited (MMG) today reported its interim financial results for the six months ended 30 June 2020, producing 168,938 tonnes of copper and 113,071 tonnes of zinc across its operations.

“I am pleased to report that we continued production at all operations, despite the challenges presented by COVID-19,” said CEO Geoffrey Gao. “During this uncertain time, our focus remains on maintaining safe operations, ensuring the health of our people and communities and optimising operations wherever possible.”

The Company reported a net loss after tax of US$182.7 million during the first six months of 2020, including a loss of US$158.0 million attributable to equity holders. This result primarily reflects the impact of COVID-19, with lower commodity prices and sales volumes. A strong rebound in key commodity prices over recent months gives cause for some optimism regarding the second half of the year.

The Company’s net debt also increased by US$69.6 million due to the impacts of COVID-19 on operating cash flow. At 30 June 2020 there was approximately 38,000 tonnes of copper in concentrate held on site at Las Bambas, drawdown of which will extend into 2021, based on current rates.

Las Bambas produced 131,698 tonnes of copper in copper concentrate during the half. The operation’s revenue of US$751.2 million was 17% lower than during the same period in 2019, primarily driven by lower commodity prices and lower metal sales volumes.

Kinsevere copper cathode production was 26% higher than the corresponding period in 2019, at 36,505 tonnes, attributable to higher mill throughout and higher ore feed grades due to the transition of mining back to the Central pit. Revenue also increased by 12% to US$198.5 million due to higher production and sales volumes.

Dugald River produced 79,177 tonnes of zinc during the first half. However, revenue reduced by 26% to US$120.9 million, largely due to the impact of lower metal prices.

Rosebery produced 33,894 tonnes of zinc during the half, with production of all metals impacted by lower mill throughput and lower feed grades as mining activity continues to advance at deeper levels. Revenue decreased by 16% to US$119.4 million primarily driven by lower commodity prices and sales volumes, in part offset by increased by-product revenue from gold and silver.

“While managing the impacts of COVID-19 has been our focus, we continue to drive our longer-term strategy and the transformation of our business”, Mr Gao said. “We have implemented cost saving and cash preservation initiatives and have worked to improve the productivity at each of our operations. These initiatives are part of our commitment to build a culture of excellence and produce the maximum value from our assets.”

Due to ongoing uncertainty related to the impacts of COVID-19 in Peru, guidance for Las Bambas has been withdrawn at this time. Guidance for the production of copper cathode at Kinsevere remains unchanged at 68,000 to 75,000 tonnes and zinc production at Dugald River and Rosebery is expected to be between 225,000 and 245,000 tonnes.