Zimplats reports 16% increase in revenue, gets $6.6 mln in export incentive
HARARE, Platinum producer, Zimplats says increase in metal prices and higher sales volumes spurred the company’s 16% increase in revenue to $237.7 mln in the interim period ended 31 December 2016 compared to $204.4 mln same period in 2015.
According to the company’s half year statement, revenue increases were in tandem with production after Platinum and 4E metal production for the period increased by 4% to 135 824 ounces and 273 905 ounces from 130 342 ounces and 262 749 ounces respectively due to higher mills throughput.
Chief executive Alex Mhembere said platinum ounces sold increased by 4% to 133 937 ounces compared to 128 431 ounces sold same period last year. As a result, the gross revenue per platinum ounce for the half year at $1 745 was 10% higher than the $1 591 reported during the same period last year.
Mhembere said cost of sales reduced 4% to $179 mln compared to last year’s $185.7 mln mainly due to the decrease in depreciation arising from the increase in life of Bimha Mine due to extension of boundaries and price reductions achieved on consumables and procurement contracts.
“Resultantly, gross profit margins gained from 9% in the prior period to 25% in the current half year,” he said.
Mhembere said administrative expenses for the half year at S$22 million were 61% higher than the $13.7 million reported during the same period last year mainly driven by a benefited from the reversal of FY2015 bonus and retrenchment costs over provision.
He added that share based payments for the half year were higher than the same period last year in line with the improvement in the price of the underlying shares.
Mhembere said selling and distribution expenses for the period at $3.5 mln were 182% higher than same period last year due to the export of concentrates which attract higher transport charges.
Zimplats royalty and commission expense increased by 16% from $5.1 million reported in the same period last year to $5.9 million in line with the increase in sales revenue.
Meanwhile, Mhembere said during the half year, the company benefited from export incentive of S$6.6 mln and a reversal of impairment of $13 mln on the previously written off Reserve Bank of Zimbabwe (RBZ) debt.
“The Government of Zimbabwe issued to the Group’s main operating subsidiary, Zimbabwe Platinum Mines (Private) Limited, treasury bills with a total nominal value of US$34 million in settlement of the principal amount owed by the RBZ. The treasury bills have been discounted using a rate of 27.5% to arrive at a fair value of US$13 million which has been recognised in the income statement.”
In terms of operations, tonnes mined during the half year increased 6% to 3.47 million tonnes compared to the same period last year mainly due to the ramping up of production at Mupfuti and Bimha mines.
In addition, South Pit Mine recorded an increase of 18% from 423 000 tonnes reported for the same period last year to 500 000 tonnes.
Mhembere said tonnes milled increased by 6% to 3.21 million tonnes compared to the same period last year in line with improved ore supply.
Four elements (platinum, palladium, rhodium and gold) (4E) mill head grade at 3.239g/t was marginally better than the 3.223g/t achieved for the same period last year reflecting sustained grade control at the Group’s operations.
Mhembere said the re-development of Bimha Mine remains on schedule to reach full production in 2018. As at December 2016, a total $24 mln had been spent on the project.