China copper smelter Daye doubles profits in virus-dominated 2020

China Daye Non-Ferrous Metals Mining

31/03/2021 14:43

* Hubei-based Daye posts best profit in 17 years at 306.4
mln yuan
    * Says 2020 was 'extremely difficult and extraordinary' amid
virus
    * Keeps 2021 copper cathode output target flat at 510,000
tonnes

    By Tom Daly
    March 31 (Reuters) - China Daye Non-ferrous Metals
 0661.HK , a copper smelter in the coronavirus epicentre of
Hubei province, said on Wednesday profits more than doubled in
2020 as a rally in prices helped make up for severe disruption
early in the year.
    Daye said in a filing it made net income of 306.4 million
yuan ($46.8 million) last year, up from 146.7 million yuan in
2019. That is its best result since a 723 million yuan profit in
2003, Refinitiv Eikon data show.
    The jump was due to rising prices for copper, gold and
silver, as well as financial and tax benefits the company
received to help it through the pandemic, said Daye, which cut
operating rates in February and March 2020 and saw some staff
test positive for COVID-19.
    "The year 2020 was extremely difficult and extraordinary,"
Daye said, noting it had to deal with mine shutdowns and floods
as well as "the pandemic of the century ... and other shocking
external challenges." 
    Nonetheless, the company met its revised target of producing
around 510,000 tonnes of copper cathodes last year, down 4.3% on
2019, and aims to produce the same amount in 2021.
    Revenues fell 10.4% to 29.4 billion yuan in 2020 due to the
slight decrease in production, Daye said, even as copper prices
 CMCU3  rebounded from a four-year low in the wake of the virus
outbreak to notch an annual gain of around 25%.
    The company said it intends to accelerate construction of
its new 400,000 tonnes per year copper smelting plant in
Huangshi, without providing a launch date. It said in August the
plant would be put into production in 2022.  urn:newsml:reuters.com:*:nL4N2FW0A6 
    The profit outlook for smelters now is "gloomy," Daye
warned, citing record low treatment charges for imported copper
concentrate that are "far below the average minimum" amid fierce
competition for feedstock and unstable supply.  urn:newsml:reuters.com:*:nL1N2LG16Z
    ($1 = 6.5478 Chinese yuan renminbi)

 (Reporting by Tom Daly. Editing by Mark Potter)
 ((tom.daly@thomsonreuters.com; +86 10 5669 2119;))