Jinchuan Group International Resources (2362) H1 2024 earnings summary

Executive summary

• Achieved a turnaround from a net loss of US$12.5 million in 1H 2023 to a net profit attributable to owners of US$12.8 million in 1H 2024, driven by higher copper prices, lower production costs, absence of cobalt inventory impairment, and reduced net exchange losses.

• Revenue for 1H 2024 was US$283.0 million, down 14% year-over-year, mainly due to lower trading volumes and reduced copper/cobalt production.

• EBITDA increased significantly to US$75.0 million from US$40.2 million year-over-year.

• Gross profit rose 52% to US$43.0 million, reflecting improved margins and the absence of cobalt inventory impairment.

• Produced 28,578 tonnes of copper (down 5% YoY) and 681 tonnes of cobalt (down 50% YoY); sold 26,222 tonnes of copper and 991 tonnes of cobalt.

Financial highlights

• Gross margin improved to 15.2% (up from 8.7% YoY).

• C1 cash cost per tonne of copper decreased 13% year-over-year to US$4,469.

• Mining operations revenue remained stable at US$222.8 million, while trading revenue dropped 44% YoY to US$60.3 million.

• Basic and diluted EPS: US$0.07 cent (vs. -US$0.10 cent YoY).

• Bank balances and cash: US$107 million (up from US$85 million at 2023 year-end); total bank borrowings and overdrafts: US$336.0 million.

Outlook and guidance

• Copper prices expected to rise in late Q3 and Q4 2024, supported by infrastructure and energy transition demand.

• Musonoi Project construction progressing well, with commissioning targeted for early 2025.

• Intends to expand through M&A, aiming for copper production of 200,000 tonnes per year and nickel production of 100,000 tonnes per year.

• Market cap target set at HKD50 billion and annual revenue goal of over US$5 billion.

• Capital market strategies include asset restructuring and global acquisitions in copper, nickel, and cobalt.