Mining companies post profits amid calamity

Vinacomin earned almost US$2.6 billion in revenue, up five per cent year-on-year and equivalent to 49.7 per cent of its annual target. File Photo

This is good news for the coal sector, despite a reported loss of an estimated VND1.2 trillion (US$55 million) in the rainstorms and floods in the northern coastal Quang Ninh Province.

The torrential rain and floods, the worst catastrophe in the past four decades that began on July 26, have severely affected mining and business activities here. All coal production in Quang Ninh, which is known to have the largest coal reserves, has been halted to focus on prevention of floods and post-flood recovery.

Besides the report of the flood damage, Vinacomin said its business continued to grow in the first six months of this year. The group earned almost VND56.7 trillion ($2.6 billion) in revenue, up five per cent year-on-year and equivalent to 49.7 per cent of its annual target.

Eight mining companies have reported profits on the stock exchanges.

As of the end of June, the total revenues of these eight companies was more than VND12.3 trillion ($564.2 million), a 10 per cent increase over the same period last year.

On the Ha Noi Stock Exchange, Vinacomin - Coc Sau Coal Co (TC6) posted the largest revenue of VND1.286 trillion ($59 million) in the second quarter, raising the figure for the first-half of the year to nearly VND2.46 trillion ($112.8 million).

Vinacomin - Cao Son Coal Co (TCS) came a close second, earning more than VND1.284 trillion ($58.9 million) during the April-June period, while its six-month figure was VND2.6 trillion ($119.3 million). This company also reported the highest growth rate of 23 per cent during the period.

Regarding profit growth, TCS also made the largest profit of nearly VND21.15 billion ($970,000) in the second quarter, an impressive growth compared with a tiny profit of just VND1.13 billion ($51,800) in the first quarter and a loss of VND50.22 billion ($2.3 million) in the second quarter of last year.

The company attributed such good results to stable weather conditions in the period, which ensured the coal quality and consumption.

Vinacomin - Ha Lam Coal Co (HLC) also posted good growth, making VND12.5 billion ($573,000) in profit over three months till June, a 226 per cent year-on-year increase.

The total profits of the eight companies reached a combined VND111.52 billion ($5.1 million) in the first half, up 140.6 per cent over the same period in 2014.

However, analysts said a very difficult period was coming for mining companies in the next few months.

According to a recent report of VPBank Securities Co, Vinacomin – Mong Duong Coal (MDC) was likely suffer the most in the ongoing floods in Quang Ninh, as its coal mines were flooded from -250m to -90m, along with damaged infrastructure. MDC posted a modest profit of more than VND8.4 billion ($385,300) in the second quarter, but incurred losses of more than VND8 billion ($367,000) in the first three months.

The company said it would take three to five months to resume operations.

Other companies also have had their mines flooded and have halted production work.