CMOC Group (3993) Q2 2024 earnings summary

Executive summary

• Achieved record high revenue of RMB102.82 billion in 1H2024, up 18.56% year-over-year, and net profit attributable to the parent of RMB5.417 billion, up 670.43% year-over-year, with operating cash flow of RMB10.779 billion, up 23.02% year-over-year.

• Copper and cobalt production in the DRC more than doubled, with copper sales volume up 510.53% and cobalt sales up 3,441.73% year-over-year, contributing significant incremental global supply.

• Major product output and sales, especially copper, cobalt, and niobium, exceeded guidance medians; trading business (IXM) delivered strong results, with net profit attributable to the parent of RMB664 million.

• Maintained robust liquidity, with cash and cash equivalents of RMB30.9 billion and over RMB170 billion in credit facilities, with more than 70% unused.

Financial highlights

• Revenue: RMB102.82 billion (+18.56% YoY); Net profit attributable to shareholders: RMB5.417 billion (+670.43% YoY); EBITDA: RMB15.987 billion (+197.83% YoY); Operating cash flow: RMB10.779 billion (+23.02% YoY).

• Basic and diluted EPS: RMB0.25 (+733.33% YoY); Weighted average ROE: 8.82% (+7.50pp YoY).

• Gearing ratio: 59.16% (down 5.72pp YoY); EBITDA/total debt: 0.31; Interest coverage: 6.10.

• Total assets: RMB185.88 billion (+7.46% from year-end 2023); Net assets attributable to shareholders: RMB61.999 billion (+4.13% YoY).

Outlook and guidance

• Copper demand expected to rise with global economic recovery, energy transition, and infrastructure investment; prices to remain robust.

• Cobalt supply growth to ease, with strong demand from new energy vehicles; medium- to long-term prices expected to strengthen.

• Molybdenum and tungsten markets to remain in tight balance, with stable or rising prices.

• Niobium and phosphate markets expected to see stable or rising demand and prices, especially in Brazil's peak fertilizer season.

• Company to focus on cost reduction, efficiency, ESG leadership, and new project development in 2H2024.