Chinese iron ore trading and cement businessProsperity Minerals (LON:PMHL) boosted its first-half revenues by 17 per cent to US$507.8 million while producing a pre-tax profit of US$8.4 million (H1 2011: US$2.5 million loss), the firm said today.
Reporting its interim results for the six months to September 30, Prosperity said that while the firm increased the amount of iron ore shipped during the first half to 2.8 million tonnes, from 2.7 million tonnes in H1 2011, its revenue increase was also due to higher average selling prices. However, the operating profit per tonne came in lower at US$3.6 million (H1 2011: US$6.6 million) because, the firm said, margins continue to come under pressure due to the abandonment of the industry’s annual price fixing and greater direct trade between miners and steel mills.
Prosperity’s cement operations produced an attributable profit of US$8.7 million, compared to a loss of US$0.6 million in H1 2011. The firm said that its 33 per cent-owned Anhui Chaodong Cement business produced and sold more cement and clinker as demand in its region was strong and average selling prices higher. The 16.1 per cent-owned TCC Liaoyang business produced an operating profit of US$0.2 million, but it ended up contributing a loss of US$1.9 million (H1 2011: US$0.04 million) due to as loss on demand disposal of US$2.1 million caused by a share issuance in August.
Prosperity said that its real estate development projects business made a loss of US$3.5 million, compared to a US$0.6 million profit in H1 2011.
“I remain confident that the company will continue to trade well in both iron ore and real estate despite challenging market conditions brought about by an unsettled iron ore market and Chinese government policy, together with continuing global economic uncertainties,” said David Wong, Prosperity’s chairman and chief executive officer.
Prosperity’s share price was down 1.8 per cent at 82 pence in early trading today.
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