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MMG moving closer to Beijing

MMG is maintaining a cautious outlook after posting a half-year loss, but is confident of a better second half.
MMG moving closer to Beijing MMG moving closer to Beijing MMG moving closer to Beijing MMG moving closer to Beijing MMG moving closer to Beijing

MMG CEO Geoffrey Gao in Melbourne

Staff reporter

The company reported a net loss after tax of US$182.7 million, including a loss of $158 million attributable to equity holders, due to COVID-19, lower commodity prices and sales volumes.

"The recent recovery, while welcome, does have a degree of uncertainty to it," MMG CEO Geoffrey Gao said on a conference call.

Revenue fell 14% to $1.19 billion, while net cash generated from operations rose 26% to $366.6 million.

EBITDA was down 41% to $383.6 million, with an EBITDA margin of 32%.

Production in the first six months of the year was 168,938 tonnes of copper and 113,071t of zinc

Las Bambas in Peru produced less copper due to the impacts of COVID-19 restrictions and limited workforce availability.

Full-year guidance for Las Bambas has been withdrawn, but copper cathode guidance for Kinsevere remains unchanged at 68,000-75,000t, while zinc production from Dugald River and Rosebery is expected to be between 225,000-245,000t.

The company's net debt increased by $69.6 million to $7.54 billion due to the impacts of COVID-19 on operating cashflow.

Chief financial officer Ross Carroll said the company had secured $885 million in new debt facilities.

"We consider them to be low-cost sources of additional liquidity should they be required," he said.

MMG is based in Melbourne, listed in Hong Kong and backed by 72.5% shareholder China Minmetals Non-ferrous Metals Co.

Gao said the company had recently started taking steps to open an office in Beijing.

In the past three years, it has reduced the headcount at its Melbourne headquarters by 60%.

"We are essentially changing the way we work at MMG," Gao said.

Shares in MMG rose 3.5% to HK$2.07, valuing the company at US$2.15 billion.