Hong Kong-based iron ore mining operator IRC Limited has announced its interim results for the six months ended 30 June this year. In the given period, IRC Limited recorded a net profit of $5.9 million, compared to the net loss of $25.2 million in the same period of the previous financial year, while the company’s total revenue rose by 19 percent to $106.2 million, compared to $89.2 million recorded in the same period of the previous financial year.
In the first half of the current year, the company’s EBITDA increased by 151.5 percent to $33.2 million compared to $13.2 million in the first half of 2019. The growth was primarily driven by a higher production volume, strong iron ore prices, and favorable foreign exchange movements.
Meanwhile, in the first six months of the year, IRC’S production volume of iron ore increased by 14.3 percent to 1.39 million mt and its iron ore sales volume increased by 11.4 percent to 1.38 million mt, both year on year.
Good production rates, strong iron ore prices and the weak Russian rouble contributed to IRC’s profitability. Despite the devastating effect of the coronavirus on the global economy, iron ore was one of the best performing commodities in the first half of 2020.
Speaking to Bloomberg, Peter Hambro, chairman of IRC, pointed out that, as they are operating in a scarcely populated area, they did not have many cases, so the pandemic has not made much difference to their production, also supported by strong iron ore demand from China. Commenting on iron ore prices, Mr. Hambro said that there will be more iron ore supply from Brazil and Australia as life is returning to normal with Covid-related pressure easing down. “Commodity prices are rising because the US dollar is becoming less attractive around the world. For the beginning of next year, estimated iron ore prices stand at over $100/mt and our cash cost is at around $50/mt, so we have good margins even given the discounts in the northeast of China,” Hambro noted. The IRC chairman also expects that steel production in China will stay at the same levels as the government wants.