eBusiness Weekly
Enacy Mapakame
Bindura Nickel Corporation profit after tax for the year to March 2018 jumped 857 percent to $5,8 million, against the background of a $4,3 million impairment last year, which eroded profitability.
Gross profit increased by 35 percent to $18,8 million during the period under review compared to $13,9 million achieved in the prior year and this was in line with the growth in revenue.
Chairman Muchadeyi Masunda said the jump in profit was also achieved due to operating efficiencies and cost management strategies, which resulted in a proportionately lower cost increase than the growth in revenue.
At $53,6 million, revenue was 19 percent above last year’s $45,1 million on increase in average nickel price on the international market realised in the financial year under review.
Other income went down 99 percent to $1,9 million.
The group embarked on cost containment measures during the year. Reluctantly, total administration expenses went down to $4,82 million from $7,59 million in the comparable prior year.
BNC said there was improvement in the global price of nickel. The average net realised price for concentrate increased 11 percent to $7 249 per tonne compared to $6 519 per tonne realised in the prior year.
There was a general resurgence of the Chinese stainless steel market coupled with the hype surrounding the electric vehicles (EV) and use of nickel in the manufacture of EV batteries.
Total nickel production decreased by 2 percent to 6 620 tonnes compared to last year. The decline was in line with the lower milled tonnage.
Output from ore milling activity for the year was 11 percent lower to 390 211 tonnes on a deliberate strategy to focus on production of massive ores in order to mitigate challenges concerning availability of equipment.
Head grade was 1,89 percent compared to 1,73 percent in the same period last year. There was a modest improvement in recovery at 89,6 percent from 88,8 percent due to the higher ore grade received.
Total assets grew by 10 percent to $106 million. Total equity increased 15 percent year on year in line with retailed earnings.
Non-current liabilities increased by $2,3 million to $27,9 million on the back of increase in the environmental rehabilitation provision and deferred tax liabilities.
Current liabilities increased by 8 percent to $32,9 million on an increase in trade and other payables.
Current assets grew 42 percent to $28 million on increase in inventories, trade and other receivables as well as cash and short term deposits.
On capital projects, the group has put on hold its smelter project due to capital constraints but management is hopeful the promising global prices of nickel will see completion of the project soon.
Analysts predict a steady increase in nickel prices in the medium and long term owing to expected rise in demand for nickel and lithium, particularly in light of the envisaged use of electric vehicles in developed countries.
“Currently, only 36 000 tonnes of nickel are used for the manufacture of batteries. However, market estimates are that the demand for nickel for this purpose will have increased between 300 000 tonnes and 500 000 tonnes per annum by 2015” said Masunda.
Bindura did not declare a dividend to preserve capital.
