Good Production Rate, Iron Ore Price and FX Rate
Maiden Underlying Profit of C.US$6 Million
The largest iron ore mining operator in the Russian Far East, IRC Limited (“IRC” or the “Company”, together with its subsidiaries, collectively “the Group”; stock code: 1029) is pleased to announce its interim results for the six months ended 30 June 2020.
– Revenue increased by 19% to US$106.2 million (30 June 2019: US$89.2 million)
– Cash cost down by 4.7% to US$48.8/t (30 June 2019: US$51.2/t)
– EBITDA has more than doubled, increasing to US$33.2 million (30 June 2019: US$13.2 million)
– Profit of US$5.9 million (30 June 2019: loss of US$25.2 million)
– 14.3% and 11.4% improvement in production and sales respectively over the same period in 2019
– Stable production capacity of 89% (30 June 2019: 78%)
– K&S operated at more than 90% capacity in July and the early part of August. Planned ball mill maintenance and a period of heavy rains affected production in August. Normal production has now been resumed, month-to-date capacity of c.80%.
– Impact of COVID-19 not as yet significant
Commenting on the results, Peter Hambro, Chairman of IRC said: “The first half of 2020 has been a significant time for the development of IRC with the Company achieving its maiden underlying profit. While the profit is modest, the milestone is significant. We are unlocking the great potential that we see in the Company. While K&S is currently operating at close to its full capacity, IRC has the track record of running a mine at higher than its designed capacity. We see K&S having the ability to do the same, and look forward to seeing the mine coming-of-age to unleash its full potential.
Good production rate, strong iron ore price and weak Russian Rouble contributed to IRC’s profitability. Despite the devastating effect of the COVID-19 on the global economy, iron ore was one of the best performing commodities in the first half of 2020. Coupled with K&S’s good production rate, IRC’s revenue recorded a significant increase in the first half of this year. We also benefitted from the weak Russian Rouble, allowing the Group to lower its cost level. These positive factors contributed to our maiden underlying profit.
We are pleased with the financial results of IRC in the first half of 2020 and are striving for further improvements as K&S continues to raise its production level. We are pleased that much has been achieved in the first half of 2020. That said, continuous improvement is our goal and we are not resting on our laurels. We believe that the foundations of our Company are in place for further enhancement in operational and financial performance. Looking to the future, we are committed to ensuring that IRC continues to prosper and grow in a sustainable manner. We shall increase our production from our world-class assets to maximise shareholders’ value. We would like to thank our stakeholders for their continued support.”
For more details of the Group’s interim results, please refer to full announcement at: https://files.services/files/370/2020/0826/20200826061501_65488741_en.pdf
About IRC Limited
IRC Limited (1029.HK) is the largest iron ore mining operator in the Russian Far East. Its operations focus on producing high-quality iron ore concentrates, with long-term relationships with customers in China and Russia. IRC is unique in the iron ore market due to its competitive advantages, namely superior geology and direct access to China, the world’s largest iron ore market, through established world-class infrastructure.
For more information, please visit: http://www.ircgroup.com.hk/
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