Jiangxi Copper Co, one of China’s biggest copper producers, posted its best quarterly profit in 10 years on Friday as a rise in output allowed it to take advantage of record high prices for the metal.
The Nanchang-based company, an integrated producer that controls both mines and smelters, said in a filing first-half net income quadrupled year-on-year to 3.04 billion yuan ($469.5 million).
That implies a second quarter profit of 2.18 billion yuan, marking Jiangxi Copper’s best quarterly result since the second-quarter of 2011, Refinitiv Eikon data shows.
Its income would have been even higher but for a 1.59 billion yuan impairment on assets in the first half, around one- third of which was set aside for future expenditure on environmental protection at the Yongping mine, the company said in a subsequent filing.
That reduced first-half net profit by 1.2 billion yuan.
Half year revenue was up 54.3% from a year earlier at 226.79 billion yuan as benchmark copper prices hit an all-time peak of almost $10,750 a tonne in May on recovering demand and financial stimulus measures to combat the negative impact of the pandemic on the global economy.
Prices have since eased to around $9,350 a tonne.
Jiangxi Copper’s refined copper cathode production over the six months was up 12.6% year-on-year at 901,300 tonnes, on track to meet an annual target of 1.73 million tonnes.
Copper concentrate output fell 1.5% to 100,300 tonnes.
The company also said prices for copper-smelting byproduct sulphuric acid were on average four times higher in January-June than a year earlier, swelling earnings further.
In the second half of the year, low copper inventories and bright prospects for consumption from the solar power and new energy sectors are set to keep the copper market balance tight, Jiangxi Copper said.
($1 = 6.4746 Chinese yuan renminbi)
(By Tom Daly; Editing by Barbara Lewis and Emelia Sithole-Matarise)