29th Feb 2016 09:58
LONDON (Alliance News) - Base Resources Ltd shares dropped on Monday after it said its pretax loss was wider in the first half of its financial year as higher financing costs offset a rise in revenue.
Base shares were trading down 27% to 3.10 pence per share on Monday morning.
The mineral sands producer operating in Kenya said its pretax loss in the six months to the end of December widened to AUD11.2 million from the AUD10.2 million loss booked a year earlier despite reporting a material rise in revenue.
Revenue in the first half of the financial year rose to AUD81.7 million from AUD61.8 million, representing a 32% rise. That pushed its profit from operations up to AUD18.5 million from USD8.6 million.
However, substantially higher financing costs of AUD18.1 million compared to only AUD11.7 million last year caused its pretax loss to widen.
Total debt at the end of 2015 stood at AUD288.1 million compared with AUD292.6 million at the end of June, with its cash balance dropping to AUD12.4 million from AUD40.9 million at the end of June.
Before financing costs, Base managed to report a pretax profit of AUD6.8 million compared to a AUD1.5 million profit a year ago.
The rise in revenue came from higher production and sales of ilmenite, rutile and zircon in the six month period.
Ilmentite sales in the six month period amounted to 233,642 tonnes compared to 169,923 tonnes a year earlier, rutile sales rose to 38,581 tonnes from 36,251 tonnes and sales of zircon increased to 13,917 tonnes from 8,484 tonnes.
Although a large increase in sales, average prices for for all of its products sold fell to an average of AUD286 per tonne compared to AUD288 per tonne a year earlier, equating to a price of USD207 per tonne compared to USD256 per tonne.
Although prices fell, so did the company's cost per tonne. The average cost in the six month period fell to AUD138 per tonne from AUD157 per tonne a year ago.
Importantly, production of all three minerals was considerably higher in the six month period than sales. Ilmenite production rose year-on-year to 225,770 tonnes from 208,426 tonnes whilst rutile production rose to 42,694 tonnes from 35,284 tonnes. Zircon production increased to 14,053 tonnes from 10,518 tonnes.
Production and sales in the six month period were also higher than the previous six month period ended in June 2015.
By Joshua Warner; [email protected]; @JoshAlliance
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