A research report highlights that 2025 marked a year of value reassessment for MMG (01208), as the company transitioned from a relatively high-leverage position to a stable cash-generating entity. Its leverage ratio decreased rapidly, while cash levels improved significantly. Although the company indicated no dividend distribution and potential impairments on certain assets might affect short-term market sentiment, its core assets remain stable, deleveraging has been effective, and expansion plans are clear. Key observations are outlined below.
MMG reported strong full-year results for 2025, with revenue reaching USD 6.218 billion, a 39% increase compared to 2024. Net profit after tax rose to USD 955 million. Net cash generated from operating activities amounted to USD 2.690 billion, a record high and a 67% year-on-year increase.
Profit growth was driven by increased production volumes and rising commodity prices. The company's annual copper output grew by 27%, zinc output by 6%, gold output by 22%, and silver output by 17%. Supported by USD 2.690 billion in operating cash flow, MMG's balance sheet strengthened considerably. After receiving a USD 1.159 billion dividend from the MLB joint venture, the company and its partner Khoemacau prepaid a USD 500 million loan, reducing year-end net debt to USD 3.351 billion and lowering the leverage ratio to 33%. This indicates strong underlying asset performance and a notable improvement in financial health.
The Las Bambas mine played a crucial role as a core asset, with copper-in-concentrate production reaching 410,800 tonnes, up 27% year-on-year. It contributed USD 2.831 billion in EBITDA, a 78% increase, making it the company's largest single mine. Meanwhile, the expansion project at the Khoemacau mine commenced in February 2026, aiming to increase annual production capacity to 130,000 tonnes of copper-in-concentrate and boost associated silver output to over 4 million ounces. The first batch of copper concentrate is expected in the first half of 2028, with potential to further increase production to 200,000 tonnes. This combination of stable existing production and incremental expansion is expected to secure medium- to long-term growth.
Despite overall strong performance, the company's results were affected by certain asset impairments. The Kinsevere mine recorded a USD 290 million impairment due to factors such as cobalt export quotas and power supply issues. MMG plans to prioritize deploying a battery energy storage system at the mine in 2026 to address electricity challenges. Additionally, tax disputes with the Peruvian tax authority (SUNAT) for 2014–2018 remain under appeal, while a new tax assessment of USD 162 million was issued for the 2019 fiscal year. Furthermore, the acquisition of Anglo American’s nickel assets in Brazil has been extended to June 30, 2026, due to prolonged review by the European Commission. Increasing global geopolitical instability and rising external policy and legal risks may introduce uncertainties to the company’s performance.
Investment strategy suggests looking beyond one-time non-cash impairments and focusing on improvements in free cash flow and expected revenue growth from increased production at certain mines in 2026. Against the backdrop of sustained high prices for non-ferrous metals such as gold, silver, and copper, the company's strategy of earnings growth and balance sheet improvement is materializing, underscoring its long-term investment appeal.
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