Harare – Local platinum miner, Zimplats in its 2018 annual integrated report said revenue for the year increased by 14 percent from $512.5 million in FY2017 to $582.5 million despite the 2 percent decrease in 4E sales volumes from 555 892 ounces to 542 085 ounces.

Group Chief Executive Officer, Alex Mhembere attributed the revenue increase to the increase in average prices of palladium, nickel, rhodium and copper which resulted in a 17 percent increase in gross revenue per platinum ounce from $1 868 to $2 184.

In the period under review, cost of sales marginally increased from $367.1 million in FY2017 to $368 million this year.

Gross profit margins improved from 28 percent in FY2017 to 37 percent in the current year mainly due to the improvement in average metal prices achieved.

Mhembere said operating cash costs per platinum ounce increased by 5 percent from $1 225 in FY2017 to $1 290 in FY2018 due to a 4 percent decrease in platinum produced (including metal in concentrate sold), increase in employee benefit expenses and increase in prices of consumables.

Following the introduction by the Reserve Bank of Zimbabwe of an export incentive scheme in May 2016, to promote the export of goods and services to enhance inflows of foreign currency, Mhembere said the Group was awarded a 2.5 percent export incentive on export proceeds received in Zimbabwe.

“As a result, income of US$13.6 million compared to $14 million last year was recognised in the income statement.”

On treasury bills Mhembere said the Group realised US$10.4 million compared to $20.8 million realised last year from the disposal of treasury bills.

“In March 2018, the operating subsidiary received a treasury bill from the Government of Zimbabwe with a nominal value of $11.3 million and a maturity date of 24 November 2020 in settlement for interest on the historic US$34 million owed by the RBZ.

“The treasury bill was disposed of during the year for a consideration of US$10.4 million. The principal amount of US$34 million was settled in the prior year through the issuance of treasury bills with a nominal value of US$34 million which were disposed of for a consideration of US$20.8 million in the same year.”

Resultantly, profit before income tax for the year increased from US$101.3 million in FY2017 to US$166 million.

The income tax expense increased from $55.8 million in FY2017 to $163.3 million driven mainly by a $98.1 million deferred tax charge.

He said the deferred tax charge for the current year was significantly higher than for prior year because of the change of the operating subsidiary’s status from being a special mining lease (SML) holder to a mining lease (ML) holder.

“A deferred tax charge of approximately $95.4 million was recognised in FY2018 arising from the change in the income tax rate of 15.45 percent applicable under the SML tax regime to 25.75 percent applicable under the ML tax regime (inclusive of AIDS levy).”

Current income tax and additional profits tax increased by a net total of $13 million mainly due to improved profitability offset by a $8.2 million benefit from adjustments in respect of prior years’ computations.

Consequently, profit for the year decreased from $45.5 million in FY2017 to $2.6 million.

Net cash generated from operating activities increased from $56.1 million in FY2017 to $195 million driven by the improved profit before income tax.

At year-end, the Group had bank borrowings amounting to $85 million compared to $109 million last and a cash balance of $119 million compared to $70.3 million the prior year.

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