The country’s biggest platinum miner, Zimplats recorded a 16 percent jump in revenue in the half year to December 31, 2016 due to increase in metal prices and higher sales volumes.
Platinum ounces sold during the period increased 4 percent to 133 937 ounces while gross revenue per platinum ounce at $1 745 was 10 percent higher than the $1 591 reported during the same period last year.
As a result revenue increased to $237,7 million for the half year to December 31, 2016. Cost of sales of $179 million recorded during the period was 4 percent better than the $185,7 million for the same period last year due to decrease in depreciation (arising from the increase in life of Bimha Mine due to extension of boundaries) and price reductions achieved on consumables and procurement contracts.
“Resultantly, gross profit margins gained from nine percent in the prior period to 25 percent in the current half year,” said Zimplats chief executive Alex Mhembere.
Administrative expenses for the period at $22 million were 61 percent higher than $13,7 million reported during the same period last year mainly driven by labour cost , share based payments and insurance premiums for the half year.
Tonnes mined during the period increased 6 percent to 3,47 million tonnes compared to the same period last year mainly due to the ramping up of production at Mupfuti and Bimha mines.
In addition, South Pit Mine recorded an increase of 18 percent from 423 000 tonnes reported for the same period last year to 500 000 tonnes.
Mr Mhembere said tonnes milled during the period increased 6 percent to 3,21 million tonnes compared to the same period last year in line with improved ore supply highlighted above.
Platinum and 4E metal production for the period under review increased four percent to 135 824 ounces and 27 3 905 ounces from 130 342 ounces and 262 749 ounces respectively due to higher mills throughput.
Platinum sales volumes for the half year at 133 937 ounces were 4 percent higher than the 128 431 ounces reported in the same period last year.
Royalty and commission expense for the half year increased 16 percent from $5,1million reported in the same period last year to $5,9 million in line with the increase in sales revenue.
Mr Mhembere said the half year benefited from export incentive of $6,6 million and a reversal of impairment of $13 million on the previously written off Reserve Bank of Zimbabwe debt.
Cash operating cost per platinum ounce produced decreased by four percent to $1 185 compared to the same period last year due to higher production volumes and benefit of the sustained cost management measures adopted starting from the second quarter of the financial year ended June 30, 2016 in response to the collapse in metal prices.
Consequently, profit before income tax for the period at $37,2 million was significantly higher than $0,6 million loss recorded in the same period last year.
At the end of the half year, the Group had bank borrowings of $85 million and a cash balance of $52,9 million.