MMG Reduces Debt, Increases Production Guidance for 2019

MMG (ASX:MMG,HKEX:1208) has released its full-year financial results for 2018, which included an after-tax net profit of US$136.6 million from continuing operations.

Some numbers were down, including the company’s earnings before interest, tax, depreciation and amortization, which hit US$1.7 billion. This represented an 8 percent drop from the year before, and was attributed to lower copper production at the company’s Las Bambas asset in Peru.

However, other results displayed growth for the company, such as net cash flow from operating activities of over US$1.7 billion, reducing MMG’s net debt by US$733.4 million.

According to MMG, the company’s Dugald River and Las Bambas assets have now been established in the global top 10 list of producing mines in zinc and copper respectively. Dugald River began zinc commercial production in May 2018.

“In 2018, MMG delivered a significant milestone with the commissioning of its second greenfield development project in two years with the start of commercial production at Dugald River,” MMG CEO Geoffrey Gao said in a statement.

“Throughout the year, we maintained our focus on making our business leaner, more efficient and positioned for growth. We are committed to securing a strong future for our assets through development and near mine exploration to extend mine life and to looking for our next value accretive external growth opportunity.”

Last year, MMG produced 466,475 tonnes of copper and 223,041 tonnes of zinc; for 2019, the company’s production guidance rests at 462,500 to 485,000 tonnes of copper and 250,000 to 270,000 tonnes of zinc.

The company also finalized the sale of its 90 percent interest in the Sepon open-pit copper mine in Laos, of which the Lao government owns the other 10 percent. The majority ownership was sold to Chifeng Jilong Gold Mining (SHE:600988) in November 2018 for US$275 million.

Going forward in 2019, Gao said the company expects to deliver increased metal production and plans to continue focusing on further cost reductions across the business.

Copper prices were up 1.29 percent as of 10:13 a.m. EST on Wednesday, reaching US$6,502.63 per tonne.

MMG’s share price remained unchanged on the ASX at the end of trading on Wednesday (March 6), closing the day at AU$5 per stock.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.