MMC 2012 announces weak 2012 results with lower coal sales prices

Wednesday, 13 March 2013 11:46

Mongolian Mining Corp. reported lower-than-expected results for 2012, said Visor Capital. The company increased its coal production by 32 percent year-on-year to 9.4 million tons. 2012 coal sales increased by 17 percent year-on-year to 5.6 million tons. 2012 average realized selling price fell by 26 percent year-on-year to USD 84.8 per ton. 2012 revenue decreased by 13 percent year-on-year to USD 474.5 million, whilst net loss for the period was USD 2.5 million (compared to the previous year's net income of USD 119.1 million). As in 2011, the company will not pay dividends for 2012. In 2013, MMC guides to produce 12 million tons of coking coal and expects to see a recovery in coal's realized prices. The third stage of the coal washing plant is expected to be commissioned in the first quarter of this year, bringing MMC's total annual coal processing capacity to 15 million tons. MMC is targeting to process 12 million tons of coal during 2013. "We believe the main reason for the company's weak 2012 results to be a significant decline in coal sales price, which was 5 percent below our forecast," said Visor Capital. The company said coal sales volume fell 47 percent below its estimates, and its 2013 guidance was 24 percent below its expectations. "We, however, still believe that MMC will successfully reach 20mtpa of raw coal production within the next three years, in line with our expectations."