Zimplats swings back to profit

HARARE - Zimbabwe's largest platinum producer, Zimplats, has recorded a $16,1 million profit in the half year to December 2016 compared to a loss of $0,6 million registered in the previous corresponding period.

The group’s chief executive, Alex Mhembere, last week attributed the record profits to a $6,6 million export incentive and the reversal of a $13 million impairment 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, Treasury Bills with a total nominal value of $34 million in settlement of the principal amount owed by the RBZ,” he said.

“The Treasury Bills have been discounted using a rate of 27,5 percent to arrive at a fair value of $13 million which has been recognised in the income statement,” Mhembere added.

In the period under review, cash operating cost per platinum ounce produced decreased by four percent to $1 185 compared to the same period last year due to higher production volumes and benefit of the sustained cost management measures adopted in response to the collapse in metal prices.

“Consequently, profit before income tax for the period at $37,2 million was significantly higher than $0,6 million loss recorded in the same period last year,” Mhembere said.

Zimplats, which is listed on the Australia Stock Exchange, saw its revenues jumping 16 percent to $237,7 million in the half year compared to the same period last year due to the relative increase in metal prices and higher sales volumes.

The group noted that platinum ounces sold increased by four percent to 133 937 ounces compared to the same period last year.

The gross revenue per platinum ounce for the half year at $1 745 was 10 percent higher than the $1 591 reported in 2015.

In the six months to December, the Impala Platinum subsidiary spent a total of $25,1 million on capital expenditure during the half year compared to $27,2 million spent during the previous period.

Mhembere said the redevelopment of Bimha Mine remains on schedule to reach full production in April 2018.

He added that a total of $24 million had been spent on the project by the end of last year against an approved total project budget of $92 million.

“The bankable feasibility study for (Portal 6) Mupani Mine (replacement mine for Ngwarati and Rukodzi mines) was approved by the board in November 2016,” he said adding that the development of the mine commenced and the box cut was completed during the period under review.

“Mupani Mine is scheduled to reach full production of 2,2 Mtpa in August 2025 at an estimated total project cost of $264 million,” Mhembere said.


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