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CMOC's First-Half Profit Surges as Copper Margins Widen; Cobalt Sales Hit by DRC Export Curbs

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CMOC's First-Half Profit Surges as Copper Margins Widen; Cobalt Sales Hit by DRC Export Curbs

CMOC Group (SHA:603993, HKG:3993) reported an 86% year-over-year jump in attributable profit for the first half of the year, as widening copper margins more than offset a sharp drop in cobalt revenue tied to the Democratic Republic of Congo's export curbs.

Attributable profit jumped to 16.2 billion yuan, or 0.75 yuan per share, from 8.67 billion yuan, or 0.41 yuan per share a year earlier, according to a Hong Kong bourse filing late Wednesday.

CMOC, formerly China Molybdenum, said revenue surged 43% to 135.3 billion yuan, boosted by a double-digit jump in revenue at its core mining and processing segment. Mineral trading revenue rose modestly at 2.5% year over year.

Copper was CMOC's largest revenue driver, with revenue for the metal alone rising 26% to 32.5 billion yuan, driven by growth in production and sales volume. Copper gross profit margin for the period rose to 62.9% from 53.6% a year earlier.

Meanwhile, cobalt revenue tumbled 45% to 3.2 million yuan, despite the market price for cobalt nearly doubling year over year to $25.56 per pound.

CMOC attributed this to the DRC's export quotas that kept the cobalt market tight, with shipments only resuming in the second quarter. As a result, the company's cobalt sales volume plummeted 87.6% to 5,700 tonnes.

CMOC expects the cobalt market to remain "relatively tight" in the second half of the year as DRC export quotas are expected to continue restricting supply.

The company holds an 80% stake in the Tenke Fungurume Mining copper-cobalt mine and a 71.25% stake in the CMOC KISANFU MINING copper-cobalt mine in the DRC, according to its website.

"Demand is expected to improve gradually as post-destocking lean inventories increase restocking demand; rising EV penetration and LCO demand from new consumer electronics upgrades and launches should provide additional support," the company said.

These factors are expected to provide a boost to cobalt prices in the second half, CMOC added.

On shareholder returns, the board declared an interim dividend of 0.95 yuan for every 10 shares, for a total of 2.03 billion yuan in overall interim dividend payments. The dividend is payable Sept. 24 at HK$1.09804 per 10 shares to shareholders on record as of Sept. 8.

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