Zimplats profits up 23pc

HARARE - ZIMPLATS — Zimbabwe’s largest platinum producer — recorded a 23 percent increase in profit to $37,1 million in the quarter to June 2018 from $30,3 million recorded prior comparative period, the group said.

This was, however, a 42 percent decrease compared to the $64,5 million recorded in the quarter to March 31, 2018.

In its latest report, the Aussie-listed counter said revenue for the quarter to June 2018 decreased 13 percent to $137,7 million from the previous quarter on the back of a 10 percent decrease in the volume of 4E metal sold and the softening of metal prices as gross revenue per 4E ounce decreased three percent from $1 104 to $1 067.

Tonnes mined decreased 10 percent to 1,7 million tonnes from 1,5 million tonnes mined prior quarter.

However, this was a 16 percent decrease on same quarter 2017 which came in at 1,8 million tonnes.

“This is as a result of the planned closure of the open-pit operation as Bimha Mine has now achieved design production capacity.

“With Bimha Mine now at design capacity, the group is operating at Phase 2 underground mine design capacity, which is approximately 6,2 million tonnes per year,” Zimplats said.

Net operating costs were down seven percent compared to the previous quarter.

“The previous quarter’s net operating costs benefitted from the recognition of income of $9,8 million in respect of treasury bills received in settlement of interest on the $34 million Reserve Bank of Zimbabwe advance.

“This was partly offset by the impact of the decrease in sales volumes on cost of sales and selling expenses,” said Zimplats.

Tonnes milled decreased by five percent to 1,5 million tonnes from the previous quarter due to planned mill reline shutdowns at both concentrators during the quarter.

“The 4E head grade was unchanged at 3.23g/t despite the closure of low-grade South Pit Mine due to the dilution from mining of underground workshops at Bimha Mine and faulting at Mupfuti Mine.

Overall, 4E metal production in final product decreased by six percent from the previous quarter in line with the decrease in the volume of ore milled as 4E metal sales for the quarter at 129 054 ounces were 10 percent lower than the previous quarter mainly due to the decrease in production and metal inventory movement.

Royalty and commission expenses increased by seven percent to $4,2 million from the previous quarter due to higher royalty rates when the operating subsidiary migrated from a special mining lease to an ordinary mining lease from June 1, 2018.

“This was partly offset by the decrease in revenue,” the group said.

Cash cost per 4E ounce increased nine percent from the previous quarter mainly due to the 10 percent and five percent decrease in mining and processing production volumes respectively. This was in addition to a general increase in operating costs during the quarter.

Net cash cost per 4E ounce increased six percent from the previous quarter due to the nine percent increase in operating costs which was partly offset by the increase in by-product revenue per 4E ounce driven by the nickel price increase.

Total payments to government in direct and indirect taxes increased to $60 million from the $17 million reported in the previous quarter.

“The increase was largely as a result of the payment of additional profits tax for the year ended 30 June 2017 which was payable during the quarter,” Zimplats said.

— The Financial Gazette

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