BINDURA Nickel Corporation Limited (BNC) registered a 26% increase in profit after tax to $2,8 million in the six months to September, buoyed by firm mineral prices on the international market.
An average nickel price of $9 001 per tonne was realised by the miner during the half, which was 40% higher than the average of $6 422 per tonne in the prior year.
However, sales during the half year period were down 14% to 2 980 tonnes from 3 485 tonnes last year on the back of low production and logistical challenges in moving the product out of the country.
Cost of sales increased by 11% from $16,2 million last year to $18 million in the period under review, mainly due to an increase in local costs.
Production declined to 3 076 tonnes from 3 460 tonnes in 2017.
“The 26% year-on-year improvement was in line with the improved revenue, coupled with a significant increase in net finance income.”
Ore milled for the six months was up 22% to 209 451 tonnes from 171 578 tonnes milled in the same period last year, due to the improvement in the availability of mining equipment.
All in all, sustaining cost of producing nickel in concentrate increased by 24% year-on-year from $5 567 to $6 900 per tonne as a result lower production volumes.
Total capital expenditure for the half year was $4,5 million.
The Refinery and Shangani Mine remained under care and maintenance.
Masunda said nickel prices are expected to be under pressure in the short term.
“Technically, the nickel price will be on the downside, especially given the poor risk appetite induced by the ongoing trade tensions, the mounting concerns over Chinese economic growth, the sell-offs in equity markets as well as the strength of the dollar. However, prices are expected to make a rebound if the United States and China finalise a trade agreement.”
Basic and diluted earnings per ordinary share remained flat at 0,2 cents from the 2017 comparative period.
All commitments due to bondholders as at September, amounting to $3,8 million, were honoured.
The company did not declare a dividend.
source: NewsDay Zimbabwe