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Higher commodity prices help push MMG into the black in FY'17

MMG Ltd. swung to a net profit of US$348.4 million in 2017 from a year-ago net loss of US$98.7 million, it said March 7.

The company attributed the reversal to higher commodity prices, its focus on cash generation and the contribution from its Las Bambas copper mine in Peru.

EBITDA soared 133% year over year to US$2.21 billion. The figure included US$178.6 million of pretax profit on the sale of the Golden Grove, Century and Avebury projects.

MMG reduced its net debt by US$1.45 billion as a result of increased cash generation. The company expects its balance sheet initiatives to simplify its capital structure, resulting in about US$90 million in consolidated yearly interest savings.

Revenue in the period climbed 66% to US$4.14 billion.

The group had reported record copper production in 2017, while zinc output increased 7% on a yearly basis.

MMG is aiming to produce between 560,000 and 590,000 tonnes of copper and between 190,000 and 220,000 tonnes of zinc in 2018.

CapEx in 2017 was US$705.3 million, including US$274.7 million for developing its Dugald River asset in Australia. The company estimates its 2018 CapEx to range from US$550 million to US$600 million, including about US$50 million to complete Dugald River.

Dugald River is advancing ahead of schedule and below budget, and commercial production is expected in the first half, according to the statement.

With regard to its growth prospects, MMG CEO Jerry Jiao said the group will look for the next opportunity via mergers and acquisitions, exploration and brownfield projects. Its focus, however, remains on copper and zinc.