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Eric Ng

Jiangxi Copper, the mainland's largest integrated producer of the metal, said third-quarter profit fell 26.9 per cent, mainly because of investment losses.
The Guixi, Jiangxi province-based company that produces copper, gold and silver  reported a net profit of 919.5 million yuan (HK$1.04 billion)  for the three months to September, based on mainland accounting standards, compared  with a profit of 1.25 billion yuan a year  earlier.
Sales jumped 30.7 per cent to 14.71 billion yuan, driven mainly by higher output after the company completed its 300,000 tonnes  per year Guixi smelting capacity expansion.
It  posted an investment loss of 172.15 million yuan, compared  with a  gain of 62.81 million yuan in the same period last year. No  details were given. Another loss from investment in associates and a joint venture of 73,293 yuan was also recorded, compared with a profit of 7.75 million yuan  previously.
Operating profit margin was squeezed to 8.96 per cent in the quarter from 13.5 per cent.
The company did not provide third-quarter sales volume and price figures. Three-month copper futures traded on the London Metal Exchange averaged US$7,571.25  per tonne in the third quarter, compared  with US$7,624.23  last year.
The futures contract  traded at US$4,720 yesterday  afternoon in London, after  investors dumped metals and commodities to raise cash, and on expectations of lower demand  as a result of the global economic slowdown.
Jiangxi Copper is  projected by 19 analysts polled by Thomson Reuters to post a net profit of 5.12 billion yuan for the  year, up 23.5 per cent from last year's 4.14 billion yuan. The third-quarter  decline could make it difficult for the company to meet the forecast.
In a research report released last week, Morgan Stanley analysts forecast a 43 per cent rebound in copper prices  to US$3.20  per pound next year from US$2.23 now.
'We believe China is de-stocking because of tight monetary policy, but underlying demand is intact; nearly 60 per cent of demand comes from government-led infrastructure investment in the power and transportation industries,' they said.
Jiangxi Copper shares  fell 4 per cent to HK$4.80 yesterday ahead of the results.



Jiangxi Copper posts 26.9pc decline in profit