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Finance Associated Press, July 12th - benefiting from the release of production capacity of two copper-cobalt mines in the Congo and a high copper price, Luoyang Molybdenum (603993. SH) is expected to achieve more than six times growth in H1 net income.

A spokesperson for Luoyang Molybdenum told reporters at Finance Associated Press that the company has completed nearly 60% of its annual copper production target in the first half of the year and is expected to exceed the upper limit of the annual guidance (0.52 million tons to 0.57 million tons) this year. It will become the enterprise with the largest increase in global mineral copper output in 2024.

Tonight, Luoyang Molybdenum released a performance forecast, expecting to achieve a net income attributable to shareholders of the listed company of 5.189 billion yuan to 5.735 billion yuan in the first half of 2024, a year-on-year increase of 638% to 716%; the net income excluding non-recurring gains and losses is 5.375 billion yuan to 5.941 billion yuan, a year-on-year increase of 2,343% to 2,600%.

According to Finance Associated Press reporters who reviewed the company's annual reports from previous years, the net profit of over 5 billion yuan in the first half of this year is a new high for the first half of the year since the company went public.

Regarding the reasons for performance growth, Luoyang Molybdenum stated in the announcement that the increase in copper-cobalt production and sales volume in the first half of the year, as well as the significant effects of cost optimization and technological improvement, and the strong copper market price.

In terms of production volume, Luoyang Molybdenum's copper-cobalt products are mainly contributed by the two copper-cobalt mines KFM and TFM in the Congo. The company predicts that the copper metal production in the first half of 2024 will be 313,788 tons, a year-on-year increase of approximately 101%, reaching 57.58% of the production guidance (0.52 million tons to 0.57 million tons) of the median and 75% of the annual copper production in 2023. The cobalt metal production will be 54,024 tons, a year-on-year increase of approximately 178%, reaching 83.11% of the production guidance (0.06 million tons to 0.07 million tons) of the median and 97% of the annual cobalt production in 2023.

Regarding copper prices, according to the data of Zhuochuang Information, the average market price of No.1 electrolytic copper from January to June is about 0.0795 million yuan/ton, a year-on-year increase of 17.06%.

It should be noted that there is a deeper reason behind the outstanding performance of Luoyang Molybdenum in H1. On the one hand, the company's performance in the first half of last year was based on a low base due to the "equity gold issue" in the Congo. On the other hand, after the issue was resolved, the production capacity of the two copper-cobalt mines in the local area was released.

In August 2021, the company announced an investment plan for the TFM copper-cobalt mine mixed ore project, which caused controversy over the TFM copper-cobalt mine equity gold issue in the Congo. In April 2023, both parties reached a consensus, and in May of that year, the export restrictions in the Congo were lifted, and the copper-cobalt products that had been stuck in the local area were sold one after another.