China's Jiangxi Copper H1 net profit up 35 pct on higher selling prices

Jiangxi Copper Co Ltd, China's largest integrated copper producer, said first half net profit rose 35 pct year-on-year to 2.78 bln yuan under Chinese accounting standards, mainly due to higher selling prices, which offset the impact of weak global demand. 

In its interim financial report filed with the Shanghai Stock Exchange, the company said the implementation of tighter monetary policy in China, as well as a slower global economy and rising inflationary pressures, resulted in a slowdown in demand growth for copper.

However, with production at newly acquired mines falling behind schedule, supply of copper concentrate tightened, leading to a rise in prices.

In the first half, the average copper price for three month contracts as quoted on the London Metal Exchange was 8,030 usd per ton, up 18.73 pct year-on-year.

Growth of domestic copper prices was slower that LME price growth mainly due to a weak US dollar, with the weighted average copper price for three months quoted on the Shanghai Futures Exchange up 3.27 pct at 62,886 yuan per ton.

In the first six months, the company produced 365,000 tons of copper cathode, up 50.21 pct year-on-year, while output of copper rods and wires rose 22.64 pct to 195,000 tons.

Output of gold and silver decreased by 1.11 pct and 1.96 pct respectively to 7,200 kg and 200 tons, it said.

Meanwhile, the company said its mine resource reserves also rose during the period.

In December, Jiangxi Copper and China Minerals Non-ferrous Metals Co Ltd jointly acquired 100 pct of Canada's Northern Peru Copper Corp. It also established a consortium with China Metallurgical Group to acquire rights to the Aynak Copper Mine in Afghanistan in May.

The company had additional copper metal reserves of over 4.2 mln tons in the reporting period, it said.

Operating revenue in the first half rose 55.05 pct year-on-year to 26.83 bln yuan.

Earnings per share also increased to 0.92 yuan from 0.70 yuan a year earlier.

Under international accounting standards, operating revenue rose 54.65 pct to 26.71 bln yuan. Net profit rose 31.98 pct to 2.767 bln yuan, with earnings per share rising to 0.92 yuan from 0.72 yuan a year earlier.

Looking ahead, the company said the slowdown in global economic growth may not alter in the second half, which will depress demand for copper. The dollar may rebound from time to time, which may lead to fluctuations in copper prices.

However, in view of the copper concentrate shortage globally, copper prices in the second half will remain high, the company said.

In addition, the company said it will seek to complete the issue of up 6.8 bln yuan worth of eight-year bonds with warrants, which won approval from the securities regulator last month.

Jiangxi Copper did not provide a forecast for the rest of the year.

(1 usd = 6.85 yuan)

Copyright and Exemption Declaration :¢ÙAll articles, pictures and videos that are marked with "China Aluminum Network" on this website are copyright and belong to China Aluminium Network (www.alu.com.cn). When transshipment, any media, website or individual must list the source from "China Aluminium Network (www.alu.com.cn)". We seek legal actions against anyone that disobey this. ¢ÚArticles that marked as copy from others are for transferring more information to readers, do not represent or endorse their opinions or accuracy and reliability. When other media, website or individuals copy from our website, must keep the source. Anyone that changes the articles' sources will hold the responsibilities for copyright and law problems. We also seek legal actions against anyone that disobey this. ¢ÛIf any articles copied by our website concern the copyright and other problems, please contact us within one week.