Mongolian Mining (975) H1 2024 earnings summary

Executive summary

• Revenue reached USD541.1 million for H1 2024, up from USD516.7 million year-over-year, with gross profit of USD223.8 million and net profit attributable to equity shareholders of USD133.0 million.

• Adjusted EBITDA was USD270.1 million, compared to USD258.0 million in the prior year period.

• Basic and diluted EPS were 12.05 cents and 11.85 cents, respectively, down from 13.11 cents in H1 2023.

• No interim dividend was declared for the period.

• Acquired 50% interest in Erdene Mongol LLC and disposed of 20% equity interest in Khangad Exploration LLC, both remaining subsidiaries.

Financial highlights

• Revenue rose 4.7% year-over-year, driven by higher sales volumes and improved average selling prices for hard coking coal (USD174.2/tonne vs. USD161.8/tonne).

• Gross profit margin remained stable at USD223.8 million despite higher costs.

• Net profit attributable to equity shareholders was USD133.0 million, slightly down from USD136.6 million year-over-year.

• Cash and cash equivalents increased to USD278.6 million as of 30 June 2024, with net cash from operating activities at USD159.6 million.

• Gearing ratio improved to 9.6% from 17.2% a year earlier.

Outlook and guidance

• Focus on maintaining a strong capital structure, scaling up production, infrastructure development, and business diversification.

• Gold production at the Bayan Khundii mine is expected to commence in 2025, with construction 30% complete as of July 2024.

• Cash position is sufficient to retire remaining Perpetual Notes by October 2024, enabling future dividends and share buybacks.