SHANGHAI, Aug. 18 (SMM) -Yunnan Chihong Zn&Ge’s profit in the first half of this year dropped 35.07% year-on-year to 53.74 million yuan, down from 82.77 million yuan in the same period last year, as per the company’s mid-year report.
The sharp drop in the company’s profit is due to growing operational cost and falling gross margin. Operational cost in H1 was 10.45 billion yuan, up 13% year-on-year. In the meantime, gross margin from mining and dressing of nonferrous metals and non-metal products dropped 7.08 percentage points and 4.03 percentage points, respectively, on the year-on-year basis. Income from non-metal products was from lignite mining by its subsidiary Yunnan Lancang Lead Ore. The subsidiary’s lead and coal mining operation has yet to restart due to landslide.
The company’s income from lead, silver and by-products slid from falling prices, also reducing its profit in H1. Business income from lead products declined 56.69% year-on-year, while that from silver ingot was down 49.33% year-on-year. The average SMM #1 lead price was 12,973 yuan per tonne in H1, down 6.5% year-on-year. The average #2 silver price was down 14.37% year-on-year to 3,527.12 yuan per kg.
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