by winston » Thu Oct 22, 2015 6:01 am
not vested
Less profit from gold digs
Despite increasing production and sales, gold- focused Zijin Mining Group (2899) took a fall of 14 percent in net profit in the first three quarters of this year to 1.69 billion yuan (HK$2.06 billion) compared to the 2014 period.
The cause was lower prices for gold and copper.
Excluding non-recurring losses, net profit tumbled 18.4 percent.
Production of mined gold was up 7 percent and sales volume 8 percent, but the unit selling price slumped 9 percent, offsetting a 7.3 percent trimming of selling costs.
Gross profit margin slid to 36.5 percent from 38 percent and the overall gross profit margin of mining entities 39.9 percent, down 6.59 percentage points on the performance in the 2014 period.
Zijin is now among companies weighing prospects in Australia's Cobar copper mine, which Switzerland-based Glencore is selling to cut debt.
The sale of Cobar in New South Wales and a larger project in Chile could fetch up to US$1 billion (HK$7.8 billion) according to UBS. Glencore says Cobar produces yearly about 50,000 tonnes of copper concentrate.
Zijin is pursuing acquisitions overseas with some urgency because of lower valuations in the mining sector, chairman Chen Jinghe told Bloomberg recently.
In May, it spent US$710 million buying into mines in Papua New Guinea and the Democratic Republic of Congo.
On a related front, Chinalco Mining Corp International (3668), a unit of China's biggest aluminum producer Aluminum Corp of China, remarked on a strike at its Peru Toromocho mine over pay and benefits. It was taking steps to reduce the strike's impact as talks with a labor union continued.
Source: AGENCIES
It's all about "how much you made when you were right" & "how little you lost when you were wrong"