Anglo Pacific Group PLC on Wednesday reported a profit for the first half of the year, reflecting lower re-valuation charges, but said it will see a higher boost from stronger coal prices in the second half. Here’s what the natural resources royalty and streaming company had to say:
On 1H performance:
“Portfolio contribution of $23.0m in H1 21 compared to $24.1m in H1 20, reflects lower coking coal prices and volumes at both Kestrel and Narrabri, primarily in Q1 21, but is offset by maiden contributions from the Group’s Voisey’s Bay stream of $2.4m”
On coal:
“As noted in the Business Review, despite coal prices currently trading at twelve-month highs, prices were for the most part of H1 21 significantly impacted by the continued ban on Australian imports into China.”
“The remainder of the portfolio benefited from higher commodity prices and, whilst coking and thermal coal prices are currently more than double their levels from the beginning of the year, this increase largely only took effect in the last month of the second quarter and as such will not benefit our revenue until H2 21.”
On iron ore:
“Dividends from LIORC of C$2.75 per share declared in H1 21 compared to C$0.80 per share in H1 20–benefiting from continued strong iron ore pricing throughout the first six months of 2021”
On copper, vanadium performance:
“Realised copper and vanadium prices (vanadium is up 80% year to date) were higher in the period which benefited the Company’s Mantos Blancos and Maracas Menchen revenue (the latter was impacted by a one-off off-take adjustment charge in H1 20)”
On 2H outlook:
“The recent increase in coking and thermal coal spot prices, currently at 52-week highs, accelerated at the beginning of June, lagging the increases which took hold for other commodities at the beginning of the year.”
“Coking coal prices have increased 120% in the year to date, with 90% of this occurring in the last three months.”
“In addition to coal prices, cobalt has increased by 20% in the last three months, which looks set to benefit the transformational $205m Voisey’s Bay stream acquisition completed at the end of Q1 21.”
“Coupled with ongoing momentum in the development of decarbonisation technology, and the possibility of rising inflation, we see solid fundamentals for sustained pricing levels for commodities.”
“The biggest impact on our earnings for 2021 is yet to come, with recent significant increases in the spot price of both coking coal (up 88% in the last three months) and thermal coal (up 80%) which lagged wider commodity increases and did not benefit the results in H1 21.”
“Given the significant movement in commodity prices over the last three months, it looks like H2 21 for the Company could show increased contribution from our portfolio as spot prices remain for most of our commodities firmly ahead of consensus predictions for H2 21.”
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