MMG Limited (MMG) (Stock Code 1208.HK) is pleased to report its annual financial results for the year ended 31 December 2014.

Key points

• Total recordable injury frequency improved from 2.4 per million hours worked in 2013 to 2.3 in 2014, excluding the statistics for Las Bambas projects and operations.
• Stable revenue of US$2,479.8 million due to record copper sales and a higher average realised zinc price, offset by the lower average realised copper price.
• Consistent discipline of operational management at all sites in 2014.
• EBITDA of US$780.8 million, 4% higher than 2013 and improved EBITDA margin of 31%.
• Earnings per share increased 1% to US 1.96 cents per share.
• Total profit of US$99.2 million, a 19% decrease compared to 2013.
• Earnings per share increased 1% to US 1.96 cents per share.
• The Board does not recommend the payment of a final dividend as a prudent approach to cash flow management.
• Las Bambas is on track to deliver on MMG’s growth strategy.
• MMG remains confident in the underlying fundamentals of copper and zinc, which will continue to be driven by sustainable growth in China and the economic recovery of the US and developing economies.
• MMG’s growth strategy unchanged – continued focus on maximising shareholder returns by discovering, acquiring, developing and sustainably operating resources projects around the world.

Commentary from the Chief Executive Officer:

“I am pleased to report on our MMG’s performance for 2014.

Safety

In 2014, we reported improved overall safety results as measured by a decrease in the annual total recordable injury frequency from 2.4 per million hours worked in 2013 to 2.3 in 2014, excluding Las Bambas.

While this result reflects an overall improvement, we continue to experience serious incidents across our operations. Safety is our first value and as a company, we are committed to continuing to minimise safety exposures and reducing the number of injuries and incidents that have the potential to cause serious harm.

Performance

MMG’s operations delivered a solid operating performance in 2014 producing a total of 191,307 tonnes of copper and 587,099 tonnes of zinc.

We achieved an annual copper production record (up 2% over 2013) following a strong fourth quarter at both Sepon and Kinsevere, supported by consistent results from Golden Grove and Rosebery.

Total annual zinc production of 587,099 tonnes was 2% lower as Century progressed through the final stage of the mine plan.

In a challenging year, with lower average prices for copper, MMG maintained consistent revenue of US$2,479.8 million. This was driven by robust sales at Kinsevere and Century which helped to offset reduced sales at Sepon.

The total profit for the year was US$99.2 million. Earnings per share for 2014 was US 1.96 cents. This represents a 1% increase compared to 2013.

Costs

Our operating expenses were well managed and we maintained financial discipline at all sites, evident through a further US$52.7 million, or 3%, reduction in operating costs compared to 2013. This was despite continuing cost pressures experienced across Company’s operations, offset by a favourable movement in the Australian dollar exchange rate.

We continue our ongoing commitment to operational excellence and improvement at each of our sites, in particular at Century, Kinsevere and Sepon.

Sepon reduced operating expenses by US$82.2 million following the cessation of gold production in 2013 combined with improvements in mining efficiencies.

Strategy

MMG’s vision is to build the most respected diversified base metals company – valued as one of the world’s top mid-tier miners by 2020.

In 2014 MMG made its single largest step in pursuit of sustained business growth – leading a powerful joint venture to acquire the Las Bambas copper project in Peru.

The successful acquisition was the result of over a year’s hard work and collaboration between China Minmetals Corporation, joint venture partners Guoxin International and CITIC Metals and many stakeholders in China, Peru and Australia.

The acquisition is a transformational milestone for the Company and will reposition MMG among the world’s largest copper producers. As a large-scale, low-cost, long-life asset with further growth potential, Las Bambas is expected to significantly enhance shareholder returns over the long term.

At MMG’s Queensland Operations we continue to consider our long-term strategy to utilise Century’s infrastructure while continuing our assessment of development options at Dugald River. As a long-life, high grade zinc asset, Dugald River remains an important part of MMG’s future growth plans and we look forward to continuing work on the development pathway this year.

Our 2014 exploration program focused on near-mine activities at Kinsevere within current operation tenements and newly acquired tenements within a 50-kilometre radius of the mine, along with other near mine drilling and new discovery programs. MMG invested a total of US$73.0 million in exploration in 2014.

MMG’s mission is to mine to create wealth for our people, host communities and shareholders. We will remain diligent and focused as we look to deliver for all our stakeholders.

I would like to thank our employees, communities and shareholders for your ongoing support and belief in this business. Together, we have built a company committed to delivering progress.”

Andrew Michelmore, Chief Executive Officer, MMG Limited

(i)    MMG acquired Las Bambas as part of the acquisition of Xstrata Peru S.A. in July 2014. The financial results of Las Bambas have been consolidated from 1 August 2014.

– Ends –

Media enquiries

English language
Kathleen Kawecki
Senior Group Communications Advisor
T +61 3 9288 0996
M +61 400 481 868
E  kathleen.kawecki@mmg.com

Chinese language
Christine Chan
T +852 2801 6090
M +852 6173 9039
E christine@corporatelink.com.hk

Investor enquiries

English language
Colette Campbell
Group Manager Investor Relations & Communications
T +852 2216 9610 (Hong Kong)
T +61 3 9288 9165 (Australia)
M +61 422 963 652
E colette.campbell@mmg.com  

Chinese language
Maggie Qin
Manager Stakeholder Relations China
T +852 2216 9603 (Hong Kong)
T +61 3 9288 0818 (Australia)
M +61 411 465 468
E maggie.qin@mmg.com

Downloads

• 150310_Media Release_2014 Annual_Results (PDF 161kb)
• MMG Limited – 2014 Annual Results Presentation (PDF 2mb)