SouthGobi’s Q3 2025 profit plummets amid market headwinds, asset deficiency grows

SouthGobi Resources reported a $1.1 million profit from operations for the third quarter of 2025, a substantial decrease compared to the $27.7 million profit for the same period in 2024. This decline was primarily attributed to a lower average realized selling price of $49.0 per tonne in Q3 2025, down from $67.8 per tonne in Q3 2024, and a product mix shift towards lower-priced, higher-cost processed coal amidst challenging market conditions in China. Total coal sales volume, however, increased to 3.0 million tonnes in Q3 2025 from 2.1 million tonnes in Q3 2024. For the nine months ended September 30, 2025, the company recorded a $28.9 million loss from operations, a reversal from a $74.9 million profit in the prior year, despite a rise in sales volume to 8.1 million tonnes from 4.4 million tonnes.

The company's financial position highlights a total deficiency in assets of $116.2 million as of September 30, 2025, worsening from $49.8 million at December 31, 2024, with a working capital deficiency of $282.6 million. Significant obligations include trade and other payables of $200.1 million and an additional tax and tax penalty of $24.4 million. SouthGobi secured a $33.1 million bank loan on October 7, 2025, for working capital and operational expenses, and deferred approximately $111.6 million in payments due to JDZF until August 31, 2026.