Enacy Mapakame : Business Reporter
ZIMBABWE’S largest platinum miner Zimplats says production for the year ended June 2016 hit a record 290 410 ounces, 53 percent higher than prior year, helping the company bounce back to profitability. Run of mine ore for the period surged 26 percent to 6 million tonnes. Total ore milled also improved 24 percent to 6,4 million tonnes.In the period under review palladium production increased by 53 percent to 236 375 ounces while gold rose 41 percent to 30 578 ounces. Nickel was also 40 percent higher than prior year levels.
Resultantly, Zimplats’ profit after tax for the year recovered 110 percent to $7,32 million from a loss position of $74 million despite fluctuations in global metal prices experienced in the year under review.
“This is the base upon which we will take our business forward although it may be small, it is a positive move coming from a loss position. We have survived in the storm,” said Mr Mhembere.
Revenue for the year rose 16 percent to $471,778 million from prior year’s $408,391 million on increased production and sales volumes.
Gross profit reduced 12 percent to $81 million from $93 million in the comparable period. Gross revenue per Pt ounce dropped 24 percent to $1,638 million from $2,167 million on the back of depressed metal prices.
The extractive industry has been negatively affected by the fluctuations in global prices of metals and a slowdown in the Chinese economy.
The World Economic Forum urged economies that rely on the extractive industry to review downwards their growth projections on the back of the depressed prices.
For instance, gold has fluctuated between $1 365 and $1 050 while platinum has fluctuated between $824 and $1 097 an ounce in the past year.
Mr Mhembere said price fluctuations will remain one of the company’s biggest short-term risk coupled with electricity supply.
Due to the depressed metal prices, margins were 26 percent weaker.
“We produce and market commodities, we do not determine the price. So as price takers we do not pre-determine the margins,
“The things we can control are the inputs we use for production, but we will continue to focus on efficiency and production improvement so that margins improve,” said Mr Mhembere.
Income tax for the year improved to $22 million from $130 million in the prior year which was higher due to a $55 million additional profits tax adjustments in respect of prior periods arising from the disallowance of assessed income tax losses in computing APT.
The company did not declare dividend for the year under review.
Meanwhile, Zimplats is on course with the redevelopment of Bimha Mine, which was closed in August 2014 following a partial collapse.
The mine is expected to achieve design capacity by the fourth quarter of FY2018
Bimha Mine is the group’s largest underground operation.