In H1 2020, the Company registered RMB46.744 billion revenue, up 368.44% year on year, and RMB1.008 billion net profit attributable to shareholders of the parent company, up 24.73% year on year. The Company reported RMB4.251 billion of net cash flow from operating activities, up 90.66% year on year, and RMB1.09 billion of capital expenditure.
During the reporting period, the Company maintained stable operations across its business segments and achieved all production targets despite the challenges of the COVID-19. Operations in China achieved molybdenum production of 7,070 tonnes and tungsten production of 4,664 tonnes; copper and cobalt production in the DRC reached 90,972 tonnes and 6,543 tonnes; Brazil operations produced 4,980 tonnes of niobium and 550,183 tonnes of phosphate; NPM in Australia (based on 80% equity interests) produced 13,933 tonnes of copper and 10,889 ounces of gold; IXM achieved sales of 1.24 million tonnes of concentrate and 1.14 million tonnes of refined metal.
IXM realized net profit attributable to the parent company of RMB300 million in H1. Thanks to its business model combining both spot and futures trading, IXM managed to counter the cyclical risks of the mineral commodity markets and delivered outstanding performance. The Company also takes steps to further unleash the synergy between its trading business and mining operations, with higher margin achieved via consolidation of overseas sales.
The Company continued its cost efficiency programme across all operations. Operational cost of the Company’s mining business segments was reduced by more than RMB1bn, like for like,compared with the same period of last year. In particular, DRC copper and cobalt operation achieved over USD100mn savings in cash cost, of which the mining cash cost decreased by 40.6% year-on-year and the processing cash cost decreased by more than USD60 million year-on-year; our Brazilian niobium and phosphate business realized over USD20 million savings in cash cost while registering steady improvement in niobium recovery rate; the molybdenum and tungsten operations in China reported over RMB60mn savings in cash cost through supply chain improvement and technical innovations.
Migrating into a new stage of our corporate evolution, the Company progressively carried out organizational upgrade and process realignment to create a fully integrated global management and control system. The Company has elected a new Chairman of the Board and appointed a new CEO and several other senior management roles, to enhance our growth strategy and leverage the new management team’s extensive experience in operation, cost control and corporate culture to lead the Company towards greater successes.
The Company continues managing its balance sheet and liquidity prudently. As of June 30, the Company recorded a cash and cash equivalents balance of RMB18.2bn, net interest-bearing debt ratio of 25.88%, as well as sufficient unused bank credit lines and other liquidity reserves. In July 2020, the Company entered into a precious metal streaming agreement with Triple Flag Precious Metals, the first of its kind by a Chinese company. This transaction also represents a long-term financing instrument at a very attractive cost with USD550mn cash advance to the Company.
Remarks by Yuan Honglin, Chairman of CMOC,
The global spread of COVID-19 in 2020 has brought huge challenges to global economic growth and related industries. In response to the pandemic, the Company implemented preventive measures, put in place emergency plans and leveraged its global network to mobilize medical supplies to ensure the well-being and safety of our employees. As the result of these effective preventive measures, the Company maintained stable production and operations across its all business segments during the reporting period, registering a year-on-year increase of 2.8% in copper metal production at TFM in the DRC and 17.32% in niobium metal production and 4% in phosphates production at Brazil operations. Meanwhile, to mitigate the risk of logistics disruption, especially in Africa, the Company immediately adjusted its global transportation routes, assembled alternatives through IXM’s well-structured logistics network and secured overall supply chain stability. In the meantime, the Company vigorously carried out its social responsibilities. Through our global sourcing, the Company procured and donated over RMB2mn worth of medical equipment and supplies to the local government of Luanchuan county, Luoyang Central Hospital and the First Affiliated Hospital of Henan University of Science & Technology. As pandemic preventative measures normalized in China, CMOC subsidiaries in Brazil, the DRC and Australia donated financial aides and medical supplies to the local governments and medical institutions. The Company donated a total of RMB7.2mn in form of funds and medical supplies to help global communities in fighting the COVID-19.
Cost control is the core competitiveness of mining companies. CMOC’s continued cost-efficiency initiatives delivered total cost savings of RMB1.08bn over the first half of the year. The Company has launched a number of technological innovation campaigns, such as pebble crusher, cobalt dryer, pre-feasibility study of copper-cobalt mixed ore, low-grade resources utilization and smart mining and fully automated mining. In addition, the Company is rolling out a series of management and corporate culture initiatives, including the recent realignment to the leadership structure. We will continue with process reengineering and organizational upgrade, strengthening our corporate culture and laying a solid foundation to achieve our mission of "growing into a respected world-class resource company".
Remarks by Rubin Yue, Joint Company Secretary & Board Secretary of CMOC,
In the first half of this year, the Company continued to improve its safety production records and push forward the sustainable development of all business segments. We continued operating with outstanding safety performance and reported zero environmental incidents or events including severe pollutions, excessive emissions and environmental violations. The Company obtained its MSCI ESG rating of BBB for consecutive years, one of the top performers in the global mining industry. In H1 2020, the Company continued to receive broad industry recognition. CMOC was the honored recepient of the "GoldenBee CSR China Honor Roll list for Overseas GoldenBee Enterprise" and the Caijing Magazine Award for Sustainable Internal Control.