SouthGobi Resources has narrowed its net loss for the second quarter, ended June 30, propped up by higher coal sales, which was offset by significantly lower coal prices. The company reported a net loss of $23.17 million, compared with a loss of $33.14 million in the same quarter a year earlier. SouthGobi reported revenue of $6.7 million, marginally higher than the $6.13 million reported in the second quarter of last year, despite total coal sales nearly doubling to 630,000 t. This was offset by the average realised coal price falling 52% to $12.52/t in the period, compared with $26.26/t a year earlier.
During the second quarter, the company shipped 910,000 t of coal from its flagship Ovoot Tolgoi coal mine that sells coal to Chinese customers, but only recognised revenue for 630,000 t, with the remaining 280,000 t expected to meet revenue recognition requirements in the second half of the year. Output in the quarter decreased to 550,000 t of raw coal, compared with 640,000 t in the first quarter. This decrease was owing to the company’s decision in June, in response to current market conditions, to reduce its production and place about half of its workforce on furlough.