China Molybdenum ((HK:3993)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call of China Molybdenum (CMOC) painted a largely positive picture, underscored by record profits and a robust cash flow. The company reported strategic advancements through acquisitions and operational efficiencies, while maintaining strong ESG practices. Despite facing challenges in the trading business and cobalt sales due to external factors, the overall sentiment was optimistic, suggesting a strong performance outlook.
Record Net Attributable Profit
China Molybdenum achieved a record net attributable profit of CNY8.7 billion in the first half of 2025, marking a significant 60% year-over-year increase. This impressive milestone highlights the company’s ability to capitalize on favorable market conditions and operational efficiencies.
Strong EBITDA Growth
The company reported a 23.8% year-over-year growth in EBITDA, reaching CNY19.8 billion. This growth was driven by higher commodity prices and improved sales volumes, reinforcing CMOC’s strong financial performance.
Significant Improvement in Gross Profit Margin
CMOC’s mining segment saw a notable improvement in its gross profit margin, which reached 52%, representing a year-over-year increase of nearly 6 percentage points. This improvement underscores the company’s enhanced operational efficiency.
Successful Acquisition and New Project in Ecuador
The completion of the acquisition of an Ecuadorian gold mine marks CMOC’s first venture into gold-focused mining, with production expected to commence in 2029. This strategic move diversifies the company’s portfolio and strengthens its growth prospects.
Robust Cash Flow and Reduced Gearing Ratio
Operating cash flow increased by 11.4% year-over-year to CNY12 billion, while the gearing ratio decreased to 50.15%. These metrics reflect CMOC’s strong financial health and prudent financial management.
Improved ESG Performance and Recognition
CMOC maintained its AA MSCI ESG rating and was listed on the Fortune China 2025 ESG Impact List, demonstrating its commitment to sustainable practices and corporate responsibility.
Molybdenum and Tungsten Business Growth
The molybdenum and tungsten segments showed positive growth, with the gross margin for molybdenum products increasing by 4.5 percentage points to 38.3%, and tungsten sales improving by 7% year-over-year.
Decline in Trading Business Revenue
The trading business experienced an 11.44% year-over-year revenue decline, attributed to the restructuring of low-profit product lines. This strategic shift aims to enhance long-term profitability.
Cobalt Sales Decline
Cobalt sales decreased by 9.3% year-over-year, primarily due to an export ban affecting trade. This challenge highlights the external factors impacting CMOC’s operations.
Forward-Looking Guidance
Looking ahead, CMOC is focused on organizational upgrades, cost reduction, and efficiency improvements. Despite a slight decline in operating revenue, the company expects continued growth in its mining segment, with significant contributions from copper and cobalt production. CMOC remains committed to achieving carbon neutrality by 2050, with plans for substantial investments in energy efficiency and clean energy projects.
In summary, China Molybdenum’s earnings call reflected a strong financial performance, driven by record profits and strategic advancements. While challenges exist, particularly in the trading and cobalt segments, the company’s robust growth in other areas and commitment to sustainability position it well for future success.