Majestic Corporation (MCJ) , a specialist precious metals and non-ferrous metals recycler, announced interim results for the 6 months ended June 30 2023.
Majestic's revenues remained broadly unchanged from last year's US$13m while net assets increased to US$7.6m from US$6.8m in H1 2022. Pre-tax profit decreased by 10% to US$862k, and cash was still a comfortable US$1m from US$1.8m on December 31 2022.
The main focus of Majestic during the period continued to be on urban recycling of precious metals and non-ferrous metals from WEEE and auto petroleum catalysts. The company has procurement warehouse locations in the US and the UK, and long-term suppliers in Italy, Lithuania, Mexico and Australia. Majestic also has processing facilities in Malaysia capable of handling 20,000 tons a year.
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A decent second set of interim results from Majestic since its listing on AQSE in March 2022. Turnover for the period stayed a solid US$13m, nearly unchanged from a year ago, and cash was still a comfortable US$1m for the US$8m company. Majestic remained profitable in H1, though pre-tax profit decreased by 10%. Still, this represents a notable recovery from last year's more significant drop in pre-tax profit caused by the disruption of global supply chains, suggesting the company is steadily moving toward net profit growth.
Overall, given the macroeconomic and geopolitical headwinds affecting the metals recycling and broader commodities industries in the past 6 months, this is an impressive result from Majestic. High interest rates, the conflict in Ukraine, and a shrinking GDP in China continue to affect industrial activity in sectors that are drivers for demand in commodities. Yet Majestic managed to largely maintain its profits due to an effective sales hedging strategy, cost management, and focus on long-term contracts with global customers.
As countries turn to resource nationalism and a focus on maintaining critical metals supplies in response to geopolitical challenges, Majestic is well-positioned to benefit. The metal recycling industry was worth US$229.6bn in 2021, and is expected to grow at a CAGR of 6% a year to US$384bn by 2030 as the battle for mineral resources intensifies and environmental regulation is further tightened.
Majestic's cash position should enable it to continue its expansion strategy, with its new processing facility in Deeside, UK expected to reach capacity by end of 2023, and further plans for setting up similar facilities in Europe and the US. Majestic currently operates two procurement sites in the US and UK supplied by partners in Mexico, Lithuania, Australia and Italy, and a facility in Malaysia capable of processing 20,000 tons a year.
As a metals recycler, Majestic should also appeal to ESG-minded investors. The company published its first ESG report at the end of 2022. It uses the UN's Sustainable Development Goals (SDGs) as a framework for its ESG efforts and maintains ISO and R2 certifications.
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