MMG has posted a 61 per cent drop in profits in 2018, citing the impact of ongoing “trade friction” between the United States and China.
The Chinese-controlled company today stated in its annual report that it would continue to drive efficiencies across all operations in response to the negative effect of these global trade conditions (“external headwinds”), which affected profitability in the latter half of 2018.
MMG’s reported profit after tax ($195.4 million) included a minimal contribution of $US800,000 ($1.14 million) from the Sepon copper mine in Laos.
The company announced in November last year that it had sold its 90 per cent interest in the project to Chinese company Chifeng Jilong Gold Mining for $US275 million. The Sepon sale follows MMG’s divestment of three Australian assets – Century (Queensland), Golden Grove (Western Australia) and Avesbury (Tasmania).
MMG is focused on winding down its discovery exploration programs in Australia to shift attention to its core assets of Rosebery and Dugald River, as well as the Las Bambas mine in the Democratic Republic of the Congo (DRC).
The company’s earnings before interest, tax, deterioration and amortisation (EBITDA) was down 16 per cent year-on-year to $US1.75 billion.
It expects to deliver growth in 2019 through the supply of base materials for electric vehicles (EVs) and battery storage technology.
‘As we look ahead to 2019, we anticipate some short- to medium-term market volatility due to ongoing global political and economic uncertainties, but remain confident in the outlook for copper and zinc, particularly as technological advancements drive further demand for base metals, while the outlook for supply growth remains unchallenged,” MMG chief executive officer Geoffrey Gao said.