Hong Kong-listed South Manganese (01091) reported a sharp earnings rebound for the six months ended 30 June 2026, driven by a strong recovery in electrolytic manganese metal (EMM) pricing and tighter cost control.
Revenue and profitability • Revenue rose 22.30% year on year to HK$3.56 billion, supported mainly by higher EMM and alloying material sales and expanded battery-materials output. • Gross profit climbed 42.50% to HK$788.20 million; gross margin widened 3.1 percentage points to 22.1%. • Operating profit more than doubled to HK$452.70 million (1H 2025: HK$207.03 million). • Profit attributable to shareholders surged 108.0% to HK$359.10 million, lifting basic earnings per share to HK$0.0727 (1H 2025: HK$0.0473). • The Board declared no interim dividend.
Segment performance 1. EMM & Alloying Materials – Revenue: HK$1.40 billion, up 35.7%. – Gross margin: 26.0% (1H 2025: 13.1%); segment profit HK$302.04 million (1H 2025: HK$38.90 million). – Average EMM selling price increased 39.7% to HK$17,767 per tonne; unit cost rose more slowly, underpinning margin expansion.
2. Battery Materials – Revenue: HK$870.94 million, up 15.5%. – Gross margin softened to 31.7% from 34.8% as raw-material costs increased; segment profit edged up 11.3% to HK$229.51 million. – Key product EMD average selling price rose 9.5% to HK$16,285 per tonne; sales volume fell 13.4% to 36,171 tonnes.
3. Manganese Mining – Revenue: HK$682.57 million, down 5.2% on lower volumes of Gabon ore and concentrate. – Gross margin improved to 21.3% from 12.2% on stronger ore prices and stable costs; segment profit rose to HK$85.95 million (1H 2025: HK$31.57 million).
4. Trading & Other Business – Revenue jumped 49.5% to HK$613.27 million. – Gross margin narrowed to 0.5% (1H 2025: 16.7%) as sales mix shifted toward low-margin manganese ingots; gross profit slid to HK$3.01 million.
Cost & cash position • Finance costs fell 12.1% to HK$69.84 million as total borrowings declined to HK$3.24 billion (31 December 2025: HK$3.65 billion). • Net debt decreased to HK$1.76 billion; net gearing improved to 52.5% from 66.6%. • Cash, restricted and pledged deposits stood at HK$1.48 billion. • Current ratio improved to 0.80 (31 December 2025: 0.74); net current liabilities narrowed to HK$1.20 billion. • Post-period, the group renewed or secured HK$555.40 million in new borrowings, supporting liquidity.
Capital measures On 18 August 2026 South Manganese announced a share placing of up to 987.40 million shares at HK$0.314 each, aiming to raise approximately HK$303.53 million net.
Other highlights • Impairment charges of HK$15.93 million were booked against certain property, plant and equipment. • Other income and gains doubled to HK$84.84 million, buoyed by higher subsidy and scrap-sale income. • Effective tax rate fell to 11.1% from 16.4% due to prior-year over-provisions and utilisation of tax losses.
Outlook Management will focus on expanding resource control, enhancing operational efficiency, and strengthening customer relationships while monitoring global macroeconomic uncertainties and maintaining disciplined capital management.