PERTH (miningweekly.com) – Despite higher production volumes, base metals miner MMG's revenue for the six months ended June 30, declined by 7% year-on-year, contributing to a loss of $48-million, compared with a profit of $47.7-million in the previous corresponding period.

MMG on Wednesday pointed out that its interim results were also impacted by an amortisation expense of $84.1-million as a result of a $146-million increase in the mine rehabilitation provision of its Century zinc operation, near Mt Isa.

Revenue for the interim period was down to $1.11-billion, compared with the $1.19-billion reported in the previous corresponding period, as lower copper and zinc prices affected the bottom line.

The revenue decline was reported despite a 1% increase in zinc sales volumes and a 7% increase in copper sales volumes during the six months.

Copper production for the period under review reached 98 264 t, which was 6% higher than the previous corresponding period, and was driven by higher production from the Kinsevere and Sepon mines.

Zinc concentrate production was also 6% higher, at 286 114 t, driven by higher production from the Rosebery and Golden Grove mines.

As a result of MMG's first-half performance, the company raised its copper production guidance for the full year to between 171 000 t and 186 000 t, while the guidance for zinc production for the full year was unchanged at 440 000 t to 510 000 t.

"2015 is a year of significant transformation for MMG. Our first-half results show the capability of our team to deliver in challenging times, while continuing to focus on our growth targets," MMG CEO Andrew Michelmore said.

"Our strong operating discipline and cash generation delivered an increase in earnings before interest, taxes, depreciation and amortisation (Ebitda) of 3% to $376-million and an improved Ebitda margin of 34%, despite lower commodity prices broadly impacting the market.”

Michelmore said that, while lower commodity prices and higher depreciation and amortisation had impacted the company’s first-half financial results, MMG continued to focus on what it could control – productivity and costs.

“Driven by our focus on cost reduction and operating efficiency, we achieved a further 9% reduction in operating expenses. This result included additional costs associated with higher sales volumes and was assisted by favourable Australian dollar exchange rates. Our operating model also delivered additional cost savings, with administrative expenses 26% lower during the first-half 2015 compared to the same period in 2014.”