• Company total revenue declined by 8% to US$32.5 million
  • Gross Profit nosedived by 90% to US$1.05 million
  • Company recorded a net loss of US$5.4 million and a negative cashflow balance from operations of (US$1.39 million)

Bindura Nickel, a VFEX-listed mining giant has recorded a H’Y 2022 financial period results plunged in losses. The nickel mining cooperation company’s loss pool primarily originated from a 16% recorded volume decline due to unexpected changes in the ore body which necessitated an unmatched mining model.

According to the company’s cautionary statement released on 10th Nov 2022, the orebody changed from low volume-high grade to high volume-low grade which demanded the new underground mining mobile equipment. The delivery of the proposed mining equipment was however delayed due to disruptions in global supply chains.

Total revenue nosedived by 8% to US$32.5 million on the account of a 16% decline in nickel volumes for the period. The marginally recorded 8% decline was cushioned by the 40% rise in the average nickel selling price.  

The cost of sales skyrocketed by 29% to US$24.5 million as compared to the same period in the prior year, unmatching the much lower recorded sales. In the company financials, the company directs the much higher recorded cost of sales to depreciation charges and exchange rate movements which adversely affected the cost of sales. This is much more likely as the cooperation incurred a 2,2231% exchange loss increase to US$1.5m.

The resultant loss for the cooperation is US$5.4 million coupled with net cash flow from operations of (US$1.39 million). The declining performance is most likely to take the course to 2023 F’Y financials considering the MPC’s decision to maintain strict policies for the forcible future which will maintain the exchange loss position. The Treasury Department has however reduced the USD forex IMTT which will narrow down the tax expense.

The expense structure of the company stands questionable as the increase in depreciation of 6% is not significantly taking any proportion to the 29% hike in the cost of sales.

The forecast operational environment according to the company officials remains optimistic as it forecast an upward trajectory in the selling price of nickel to US$24 000 per ton coupled with an increase in volumes.

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