29th Jul 2015 08:08
LONDON (Alliance News) - Mwana Africa PLC Wednesday said falling commodity prices, higher cash costs and lower gold sales hit the company in the last financial year and reported a substantial drop in profit despite revenue rising in the period.
The multi-commodity miner, which has operations in Zimbabwe and South Africa, reported a net profit before tax of USD14.9 million in the year ended March 31, plummeting from USD43.9 million a year earlier despite revenue climbing to USD152.3 million from USD142.5 million.
The company booked a USD5.1 million impairment reversal in the year, compared to a USD28 million reversal a year earlier which is one of the primary reasons revenue dropped so considerably.
Administrative, corporate, depreciation and impairments all experienced small increases in the year, offset by finance, restructuring, freight, insurance and care and maintenance costs falling in the period.
Earnings before interest, tax, deprecation and amortisation also fell to USD18.8 million from USD25.0 million.
Mwana Africa sold 57,799 ounces of gold during the year, down from 58,704 ounces a year earlier, comapounded by higher all-in cash costs of USD1,067 per ounce from USD959, squeezing its margin in light of falling gold prices.
The gold price sat at around USD1,183 per ounce at the end of 2014, climbing to a high of USD1,308 per ounce in January before falling to a low of USD1,073 per ounce on July 22. On Wednesday, gold was trading at around USD1,097 per ounce.
Nickel sales increased to 7,352 tonnes of concentrate from 7,129 tonnes of concentrate but costs also rose to USD12,644 per tonne from USD11,567 per tonne.
"The past year has proved to be particularly challenging for the Mwana Group as a whole as the prices of our two principal products, gold and nickel, weakened and have continued to fall since the financial year end. This was exacerbated by lower than planned production figures for the two metals," said Chairman Yat Hoi Ning.
"It goes without saying that Mwana has passed through a turbulent period during the financial year under review and in the months following the year's close. I am, however, pleased to say that the people on whom our company depends - our shareholders, stakeholders and employees at the rock face - have come up trumps," he added.
Mwana shares were down 3.7% to 1.30 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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