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China Molybdenum's Q1 profit takes YOY 53.7% hit

ChinaMolybdenum Co. Ltd. witnessed a 53.7% slump in its net profitattributable to shareholders to 141.1 million Chinese yuan, or 1 fen per share,in the first quarter despite a rebound in the molybdenum and copper markets.

The Hong Kong Stock Exchange-listed company said April 28that the molybdenum and copper markets continued under pressure in 2015. Pricesstabilized and rebounded in the first quarter, but the company said it expects thepoor market sentiment to continue into the second quarter.

China Molybdenum added that this is expected to result in a"relatively large decrease" in the company's accumulated net loss inthe next reporting period.

In the first quarter, the company produced 4,012 tonnes ofmolybdenum concentrates and 2,317 tonnes of tungsten concentrates.

The Northparkes copper-gold mine in New South Wales,Australia, produced 9,872 tonnes of salable copper during the quarter.

Net cash flow from operating activities was up 435.4% yearover year at 264.8 million yuan, but operating income slipped 2.3% to 1.16billion yuan.

Impairments for the quarter amounted to roughly 7.0 millionyuan, a 240.3% increase over the write-downs booked in the same quarter of 2015.

Further impacting China Molybdenum's first-quarter profitresult was an increase in operating cost to 971.6 million yuan from 910.5million yuan a year earlier.

China Molybdenum hopes to bolster its bottom line with theacquisition ofAnglo American Plc'sniobium and phosphates businesses in Brazil for US$1.5 billion in cash.

China Molybdenum said in a separate April 28 statement thatthe deal is expected to enhance the company's earnings and cash flow through"substantial and stable operating margins" for both the niobium andphosphates businesses.

"[China Molybdenum] will become stronger and moreprofitable by diversifying our business both geographically and by productlines," CEO Kalidas Madhavpeddi said.

"This transaction adds long life, cost-competitiveproduction to our portfolio and gives us a foothold in three leadinginternational mining jurisdictions: Australia, Brazil and China."

As of April 28, US$1was equivalent to 6.48 Chinese yuan.