Zimplats in record production, FY17 profit at $45,5 mln

Zimplats in record production, FY17 profit at $45,5 mln

HARARE, August 31 (The Source) – Zimplats’ profit in the year ended 30 June 2017 increased to $45,53 million compared to $7,32 million in 2016, boosted largely by a total of $34,8 million realised from export incentives and disposal of treasury bills from the Reserve Bank of Zimbabwe (RBZ).

In May 2016, the Reserve Bank of Zimbabwe (RBZ) introduced an export incentive scheme to promote the exports in order to enhance foreign currency inflows.

“The Group was awarded a 2.5 percent export incentive on export proceeds received in Zimbabwe. As a result, $14 million was recognised in the income statement,” reads the company’s preliminary full year report.

“In addition, the Group also realised $20,8 million from the disposal of treasury bills with a total nominal value of $34 million, which were issued by the Government of Zimbabwe to Zimbabwe Platinum Mines (Private) Limited, the Group’s operating subsidiary, in settlement of the principal amount owed by the RBZ. The RBZ debt had been written off in full in prior years.”

Gross profit margins improved from 17 percent last year to 29 percent during the year under review mainly due to firmer metal prices.

Revenue for the year increased 9 percent to $512,5 million from $471,8 million in FY2016 despite a 5 percent decrease in 4E sales volumes from 582 833 ounces to 555 892 ounces.

“Revenue was supported by an increase in average metal prices as gross revenue per platinum ounce improved from $1 638 in FY2016 to $1 868 in FY2017.”

Cost of sales decreased 6 percent to $367,1 million from $390,7 million in FY2016 largely due to the 5 percent decrease in sales volumes. Operating cash cost per platinum ounce increased by 2 percent from $1 197 in FY2016 to $1 225 in FY2017 due to a 3 percent decline in platinum production.

On operations, the group achieved a record ore production of 7 million tonnes in FY2017 compared to 6.6 million tonnes in the previous year which the company said was made possible by the redevelopment of Bimha Mine, which contributed production of 916 000 tonnes (FY2016: 442 000 tonnes).

Zimplats said it was scaling down production at Ngwarati and Rukodzi mines as planned as Bimha and Mupfuti mines ramp up to design capacities.

A total 6.7 million tonnes of ore were milled in the year compared to 6.4 million tonnes milled in the previous period and this was largely due to good plant running time achieved over the year and improved ore supply from the mines but production of platinum in converter matte decreased by 2 percent to 262 871 ounces in line with the decrease in furnace throughput.

In terms of capital projects, the Ngezi Phase 2 expansion project is now complete with total expenditures to date, including commitments, of $458 million as at 30 June.

The Selous Metallurgical Complex Base Metal Refinery refurbishment project remains constrained by cash flow challenges arising from depressed metal prices, the company added. The total project expenditure as at 30 June 2017 was $23,4 million.