logo-loader

Prosperity Minerals swings to profit, upbeat on prospects

Published: 05:45 28 Jun 2012 EDT

no_picture_pai

Prosperity Minerals (LON:PMHL) says its medium and long term prospects are very good as it expects the Chinese economy to maintain rapid growth.

The company swung to a pre-tax profit of US$10 million in the year to end March from a loss of US$17.2 million in the previous year despite a decline in revenues to US$754 million from US$971.9 million, which was in part due to the impact of China’s efforts to curb inflation.

Earnings per share came in at 4.4 cents compared with a loss of 14.5 cents a year earlier.

Prosperity declared a final dividend of nine cents, same as last year, when it also paid a special dividend of nine cents per share after selling its cement business.

The outlook for the current year is bullish with Prosperity noting that the World Bank expects the Chinese economy to grow at a rate of 8.2 percent this year compared with China’s own forecasts of 7.5 percent GDP growth.

It added that China’s economy appears to be shifting from being export-oriented to one driven by domestic demand and a growing middle class.

Investors welcomed the news with shares in PMHL climbing 3.5 percent to 72 pence by 10:10am, valuing the group at £103.25 million.

“It has been a year of challenges, not least as a result of the PRC government's continued efforts to control domestic inflation and the real estate market which have impacted all of our business units,” said chairman and CEO David Wong.

“However, I believe that, through execution of our strategy, the medium to long term prospects of the company are very good, and that, over time, we can evolve Prosperity into a successful minerals resources company.”

The cement manufacturing business, Anhui Chaodong Cement Company Limited (ACC), performed very well, booking a full year profit of US$15.8 million.

At the end of the year under review, ACC was capitalised at US$431 million, valuing the company’s stake at US$143 million.

At the iron ore trading business, total tonnage shipped fell to 4.8 million tonnes from 6.3 million tonnes, reflecting a decline in the price of iron ore.

Prosperity’s 35 percent owned Brazilian business United Goalink shipped a total of 218,808 tonnes of raw, unprocessed ore with 58 percent iron content.

Current production capacity at the business has been increased from 3,000 tonnes to 450,000 tonnes of ore.

In addition, a processing plant is currently being built to increase the quality of iron ore to 62 percent iron content and gradually raise capacity to one million tonnes per annum.

 

Meanwhile, pre-sales at the Oriental Landmark real estate company in Guangzhou are encouraging with prices exceeding the company’s initial expectations.

On June 24 this year, proceeds from pre-sales amounted to US$105.3 million, of which the company has received US$87.8 million, the majority of which will be recognised in the fiscal year 2013-14.

BenevolentAI advances novel ulcerative colitis treatment through Phase 1a trial

BenevolentAI (OTC:BAIVF) chief scientific officer Dr Anne Phelan joins Proactive's Stephen Gunnion with positive safety data from the Phase 1a, first-in-human, clinical study of BEN-8744 in healthy volunteers. Phelan explained that BEN-8744 is a potent, selective PD10 inhibitor, uniquely...

19 minutes ago