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China’s largest copper producer, Jiangxi Copper, said its net profit dropped 20.04% in 2014 on declining gross margins amid falling copper prices.
Net profit came in at 2.85 billion yuan ($464.6 million), compared with 3.57 billion yuan a year ago, according to a statement Jiangxi Copper filed with the Shanghai Stock Exchange on Thursday March 26.
The company generated a revenue of 198.83 billion yuan last year, up 13.04% on an annual basis.
Jiangxi Copper said that a gloomy global economy put significant downward pressure on the Chinese economy, adding that falling product prices and a structural surplus in the country’s nonferrous sector curbed the company’s gross margin, resulting in a net profit drop.
The producer’s sales revenue from copper cathode reached 117.27 billion yuan, up 10.1% from a year ago, but gross profit margin declined from 2.8% in 2013 to 2% in 2014 bas a result of the fall in copper prices.
Copper prices on the London Metal Exchange lost 14.78% in the year ending December 2014, the producer said.
Jiangxi Copper produced 1.12 million tonnes of cathode, 24.5 tonnes of gold, 560 tonnes of silver, as well as 2.95 million tonnes of sulphuric acid during 2014.
It also produced 209,000 tonnes of concentrate in copper metal, and 920,000 tonnes of other copper product.
In 2015, the company plans to produce 1.22 million tonnes of copper cathode, 209,500 tonnes concentrate in metal, and 1.02 million tonnes of copper products.
Jiangxi Copper’s share price on the Shanghai Stock Exchange was down in response to the result, closing in the morning session over 2% lower at 20.84 yuan per share.
Kiki Kang kiki.kang@metalbulletinasia.com Webchat: KikiKang_MB