LONDON (Alliance News) - Ambrian PLC Friday reported a dip in pretax profit in its first-half due to difficult trading conditions, though said it remains confident in its business model as it continues to source new revenue streams.
Ambrian, which provides commodity trading services and manages strategic principal investments, reported a pretax profit of USD1.2 million in the six months to June 30, compared to USD1.3 million in the first-half of 2013, which the company said was derived principally from its metals trading business in Ambrian Metals Ltd.
Ambrian Metals Ltd reported a pretax profit of USD2.2 million for the period compared with USD2.5 million for the equivalent period in 2013.
Revenue rose to USD1.53 billion compared to USD1.38 billion in the first six months of 2013.
The AML division reported a 28% increase in metal tonnages traded compared to the same period last year. A major contributor to this increase has been the establishment of its new business in Taiwan which specialises in lead and zinc, it said.
Its investment portfolio business swung to a small pretax profit from a loss last year, though this still provides the bulk of revenue to the company.
"The interim results reflect a solid performance in our metals trading activities for the period. Current market conditions affecting the metals in which we deal are challenging, but we remain confident in our business model and of a successful outcome for the year," said Ambrian.
The period has seen average copper prices per tonne drop from USD7,439 in January to USD6,955 by the end of June, it said.
"(Trading) conditions became more challenging for all participants towards the end of the period due to the volatility in forward spreads, with periods of backwardation where forward prices are less than the spot price. This change in conditions impacted the profitability of our trades. However, against this background, Ambrian Metals Ltd (its core metal trading business) has achieved a good performance over the period and, whilst we expect the current market conditions to continue, we also expect AML to achieve net revenues for the second half in line with those of the first half," said Chairman Charles Crick.
"The Group's future growth and prospects remain constrained by our asset base. We continue to work on means to increase this and diversify our revenue streams," added Crick.
Ambrian's shares were down 2.9% to 11.65 pence per share Friday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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