Here's the e-mail I just sent to MMC's CFO. Will post her responses if and when I receive them ...
Dear Ms. Baskhuu,
I am a U.S-based investor with a position in MMC's Hong Kong-listed and U.S.-listed shares.
Having quickly reviewed the first half 2017 interim results, I had a few questions I was hoping you could answer for me.
Setting aside transportation costs, why didn't MMC realize any substantial production cost per tonne economies of scale (from efficiency gains and fixed cost leverage) in the first half of 2017?
If royalty costs are captured in cost of goods sold, what costs are included in selling and distribution costs? What drove the 5-fold increase in this category for the interim period relative to the comparable period last year?'
Besides receivables growth, what caused MMC to only convert USD $28M of its USD $72M in profit from operations into operating cash flow? Are the contributing factors permanent or will MMC's cash conversion improve going forward?
If additions to property, plant and equipment were USD $29.5M for the first six months of 2017, what accounts for the USD $52M increase in Net Property, Plant and Equipment on the balance sheet between December 31, 2016 and June 30, 2017?
In today's filing, the company indicated that it collected USD $5.122 million in revenues from the sales of 0.4 Mt of middlings. These figures imply an average selling price of middlings of only USD $13 per tonne. I was under the impression that thermal coal sold at an ASP of roughly USD $30 per tonne. If that is the case, why was the ASP for middlings so low for the first half of 2017?
Thank you in advance for your time.
Sincerely,
Ponch73 (a.k.a. OMOLIVES' Apprentice and Understudy)
