Harare – ZSE listed Bindura Nickel Corporation Limited posted positive earnings for the year ended 31 March 2019 as its operating profit went up by 141% to US$21.3 million compared to the prior year’s achievement of US$8.9 million driven by exchange rate gains.
According to the Company’s results, the increase in operating profit was mainly driven by exchange rate gains after the conversion of USD denominated income into ZW$ which is now the sole legal and reporting currency in Zimbabwe.
The Company closed the year with US$54.0 million in turnover, which is 1% more than US$53.6 million recorded in the previous year driven by an increase in global nickel prices.
Profit after tax jumped 131% to US$13.5 from US$5.8 million in the prior year.
“In line with the increase in global nickel prices, the Company realised an average price for its nickel in concentrate sold of US$8 376 per tonne, compared to US$7 249 per tonne achieved in the comparative period last year,” Board Chairperson Mr Muchadeyi Masunda said in a statement accompanying the financial results.
Cost of sales increased by 14% year on year from US$34.7 million last year to US$39.5 million in the year under review mainly due to an increase in local input costs.
This is addition to subdued growth in turnover translated to a 12% decrease in gross profit to US$14.5 million in the period under review from US$18.9 million recorded the previous year.
During the period under review, sales of nickel in concentrate amounted to 6 410 tonnes compared to 6 470 tonnes sold in the comparative period last year, which is in line with a 5% decrease in nickel production from last year’s output of 6 620 tonnes to 6 289 tonnes.
The decrease in sales volumes was however countered by the increase in global nickel prices.
Mr Masunda said the decline was in line with the lower ore grade achieved, year on year.
Ore milled during the period under review was 443 879 tonnes compared to 390 211 tonnes milled in the previous year due to the improved availability of mining equipment following the introduction of two new LHDs and one rebuilt Dump truck.
Head grade was 1.64% versus 1.89% in the same period last year.
“The decrease in grade was in line with the decision made to increase the mining of disseminated ore as opposed to massives following the investment in new mining equipment referred to above,” Mr Masunda said.
During the period under review, the Company’s total equity increased by 29% year on year in line with the increase in profit.
Current assets decreased by 21% from US$28.1 million in the prior year to US$22.1 million mainly driven by a decrease in cash and short term deposits.
However, the net current asset position improved to a positive USD$1.5 million from a negative USD$4.7 million in the prior year.
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Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, firstname.lastname@example.org and email@example.com.