Managem records a decline in revenue at the end of June

After the publication of its profit warning about ten days ago, the Managem Group recently unveiled its quarterly indicators as of June 30, 2019, confirming a decline in its turnover.
As we reported in one of our previous editions, it fell sharply in the first six months of 2019.
Indeed, "the turnover at the end of June 2019 amounted to 2.16 billion DH down -13% compared to the same period of the previous year," said the mining operator in a statement explaining that this trend was marked by a significant decline in metal prices on the international market, ie -62% for cobalt, -16% for zinc -11% for copper, -9% for silver and -20% for lead.
These metal prices have undergone significant corrections at the end of June 2019 compared to the same period of the previous year, particularly cobalt, the company said in a previous statement.
Under the effect of the significant fall in these prices, Managem had then anticipated a decline in its turnover in the first half of 2019 of 300 million dirhams (MDH) and a withdrawal of its half-year net profit of 370 million dirhams over end of June 2018.
In the note of the day, the mining operator had also warned that, like all operators in the mining sector, its activity will be impacted by the reversal of a "situation characterized by uncertainties that continue to to weigh on the world economy.
It should be noted that the poor performance of the company's sales in the first quarter was, however, mitigated by the recovery in the fundamentals of its subsidiary SMI (Metallurgical Company of Imiter), which saw its indicators improve, with an increase in of money production.
Indeed, "the turnover at the end of June 2019 amounted to 424 million dirhams, a significant increase of + 23% compared to the same period of the previous year, as a result of the increase in production of 35 %, limited in part by the effect of the decline in silver prices, "said the group, noting that the significant increase in production is the result of development work undertaken within its subsidiary.
In addition, "the net debt of the SMI was -5 million DH, down 28 million DH thanks to the good performance of the company in the first half," reads the press release to the subsidiary.
Regarding the evolution of Managem's turnover, note that it was also marked by "the significant increase in gold production at MANUB thanks to the start of the 2,400t extension in Sudan" and the most significant one is cobalt production (+ 36%) thanks to increases in secondary processing capacity.
Regarding the Group's net debt, it stood at MAD 3.5 billion, up by +725 million DH, marked by Managem's investment drive, the acquisition of additional securities. of Tri-K and the inclusion of operating lease obligations in accordance with IFRS 16, which has been in effect since January 2019 ", said the mining operator.
As for the group's CAPEX, it held 798 million dirhams, 30% of which related to new development projects.
Looking back at the main achievements in the first half of the year, Managem said the group has made significant progress in realizing its strategic projects.
These include the start of production of the Sudan extension in February 2019 after completion of studies, construction, assembly and commissioning; the finalization of the start-up tests for the SMI waste disposal plant; the launch of the Tri-K project financing program in Guinea and the related due diligence studies; launch of the feasibility study for the Tizert copper project.
Another achievement: the acquisition of the additional 30% of JV securities from partner Avocet Mining. On this subject, the mining group has indicated that it now holds 85% of the Mandiana Mining Companies (SMM).