eBusiness Weekly
Tawanda Musarurwa
HARARE – Zimbabwe’s largest platinum producer Zimbabwe Platinum Holdings (Zimplats) recorded a 20 percent jump in revenue for the half-year to December 31, 2017 to $286, 1 million
The increase in revenue was on the back of improved global metal prices during the period under review.
“Revenue for the half year increased by 20 percent to $286, 1 million compared to the same period last year driven by the general increase in average metal prices,” said the platinum producer.
“The gross revenue per platinum ounce for the half year at $2 154 was 21 percent higher than the $1 775 reported during the same period last year.”
The direct costs attributable to the production of PGMs sold by Zimplats stood at $184 million, which was 3 percent higher than the same period last year’s $179 million.
This was “mainly due to the higher labour and consumables costs partly offset by the decrease in depreciation arising from the conversion of Mupani Mine Mineral Resources to Ore Reserves,” explained management.
To this extent, gross profit margin improved to 36 percent in the current half year compared to 25 percent in the prior period.
Administrative expenses for the half year amounted to $23 million. They were 5 percent higher than the $22 million reported during the same period last year.
Zimplats said selling and distribution expenses for the half year at $5, 4 million were 54 percent higher than the same period last year mainly due to the 47 percent increase in sales of concentrates which attract higher transport charges.
Royalty and commission expense for the half year increased by 20 percent from $5, 9 million reported in the same period last year to $7 million in line with the increase in sales revenue.
An impairment loss of $2, 2 million was recognised during the half year “after new information emerged that a significant portion of a certain piece of land held by the group is taken up by a freeway reservation,” said Zimplats.
During the half-year Zimplats benefited from export incentive of $5, 6 million (compared to the 2016 export incentive benefits of $6, 6 million) in 2016.
The company said cash operating cost per platinum ounce produced increased by 11 percent to $1 331 from $1 197 reported in the same period last year due to the increase in selling expenses arising from the export of concentrates produced during the planned 46-day furnace reline shutdown, increase in labour costs and higher prices of certain consumables sourced from South Africa which were affected by the strengthening of the South African Rand against the United States Dollar.
Consequently, Zimplats posted a profit before income tax for the half year of $61, 4 million compared to $37, 2 million in the same period last year. Income tax for the half year at $40, 3 million resulting in a profit after tax for the period of US$21 million compared to US$16.2 million attained in the same period last year.
As at the end of 2017, Zimplats had bank borrowings of $85 million (down from $109 million in June 2017 and a cash balance of $106, 9 million (up from $70, 3 million in June 2017).
In terms of metal production, tonnes mined during the half year increased by 1 percent to 3, 49 million tonnes compared to the same period last year mainly due to the ramping up of production at Mupfuti and Bimha mines.
Four elements (platinum, palladium, rhodium and gold) (4E) mill head grade at 3.24g/t remained unchanged from the same period last year reflecting sustained grade control.
And platinum production for the half year marginally increased to 136 152 ounces from 135 824 ounces in the comparative period.
4E metal production for the half year increased to 275 224 ounces from 273 905 ounces due to higher mills throughput.
Zimplats said the redevelopment of Bimha Mine and the development of Mupani Mine both remain “on schedule.”
