CMOC Group Reports Record H1 Profit Amid Cobalt Export Constraints and Share Price Decline
The Chinese mining giant posted CNY16.2 billion in net profit despite an 87.6% plunge in cobalt sales volumes due to Democratic Republic of Congo export quotas.
Record Profits Amid Operational Constraints
CMOC Group Limited reported net profit attributable to the parent company of CNY16.152 billion in the first half of 2026, "setting a record high," according to Board Secretary Hui Xu (earnings call, 2026-08-21). The milestone came despite significant operational headwinds, including severe restrictions on cobalt exports from the Democratic Republic of Congo.
The company's share price, however, has "fallen significantly by more than 30% from its year-to-date high (CNY28.73)," creating what analysts characterized as a "significant divergence between strong performance and a weak share price" (earnings call, 2026-08-21).
Cobalt Operations Under Quota Pressure
CMOC's cobalt segment experienced dramatic volume declines in the first half, with sales plummeting 87.60% year-over-year, even as average cobalt metal prices surged 94.22% (earnings call, 2026-08-21). The volume collapse was "mainly due to the impact of Democratic Republic of the Congo (Kinshasa)'s cobalt export quota," Xu explained (earnings call, 2026-08-21).
The company has been allocated cobalt export quotas of 31,200 metric tons for both 2026 and 2027 by Congolese authorities, and management emphasized it will "strictly adhere to its export quotas" (earnings call, 2026-08-21). The constraints drove cobalt product inventory up 54.75% year-over-year.
When questioned about potential inventory write-downs if cobalt prices retreat, Xu noted that "the Company's cobalt product inventories are measured at cost, which is significantly lower than the cobalt prices, hence, there is no need to recognize provision for inventory write-downs for the time being" (earnings call, 2026-08-21).
Gold Operations and Rising Financial Costs
CMOC's Brazilian gold mine delivered a gross profit margin of 41% in the first half (earnings call, 2026-08-21). Management indicated it would "continue to optimize costs and improve gross profit margins" but did not provide specific guidance on margin sustainability (earnings call, 2026-08-21).
Financial expenses increased more than 70% year-over-year, "mainly driven by foreign exchange losses and interest expenses on convertible bonds" (earnings call, 2026-08-21). The company has issued USD1.2 billion in zero-coupon convertible bonds. Xu stated that "the Company's overall risk exposure arising from foreign exchange rate fluctuations is not significant" and that it would use "financial instruments such as forward foreign exchange contracts to hedge foreign exchange risk as appropriate" (earnings call, 2026-08-21).
Supply Chain Stability and Market Value Concerns
Addressing concerns about the Congolese government's recent ban on copper-cobalt concentrate exports, Xu clarified that CMOC's TFM and KFM copper-cobalt mines possess "a complete set of processes and workflow from mining to processing," producing finished copper cathode and cobalt hydroxide rather than concentrates (earnings call, 2026-08-21).
Regarding shareholder value, the company announced a first interim dividend of CNY0.95 per 10 shares. When pressed on additional market value management measures such as share repurchases, Xu provided a measured response, stating the company would "continue to deeply cultivate its main business, optimize operations, stabilize dividends, enhance investment value, and improve shareholder returns" (earnings call, 2026-08-21).
According to MarginX data, CMOC is expected to report third-quarter 2026 results on October 28, 2026.
This article was generated by MarginX from the earnings call on 2026-08-21. It is not investment advice.