Enacy Mapakame Business Reporter—
Bindura Nickel Corporation Limited’s production during the half-year to September 30, 2016 improved 23 percent to 3 420 tonnes and resultantly the company bounced back to profitability albeit depressed nickel prices.Chairman Mr Yim Chiu Kwan said there was a 19 percent decrease in average nickel price received for the period to $6 198 a tonne from $7 654 in the prior year comparable period.
Nickel prices have remained depressed due to the historical high nickel stocks, lack of producer supply cuts and replacement of Indonesia ore by Philippine. London Metal Exchange nickel prices fell to seven year lows before regaining to a nine month high in July this year, supported by speculation of supply cuts in the Philippine. Production of nickel concentrate increased by 20 percent in the second quarter of the period under review to 1 866 tonnes compared to 1 555 tonnes in the first quarter.
“This was primarily due to an increase in average head grade and recoveries. Hoisting improved in the second quarter mainly due to increased scooping and fixed plant availability,” said Mr Kwan.
Revenue grew 9 percent to $22,5 million on the back of increased sales which closed the period under review at 3 464 tonnes compared to 2 762 tonnes sold in the same period last year.
Gross profit improved by 261 percent to $8,1 million from $2,3 reported in the comparable period. The company reversed the prior year’s operating loss of $4,1 million to an operating profit of $2,2 million. Bindura closed the period with a profit before tax of $1,7 million overturning a loss before tax of $4,3 million while profit after tax also improved to $1,2 million from a loss after tax position of $3,4 million incurred in the same period last year.
“The improved profitability resulted in retained earnings of $8,5 million compared to $7,3 million reported at year end,” said Mr Kwan.
Apart from increased production, Bindura also embarked on various cost containment measures in the period under review.