27th Aug 2015 09:28
LONDON (Alliance News) - Sierra Rutile Ltd Thursday said its pretax loss narrowed in the first half of 2015 despite revenue plummeting on the back of lower sales.
The mineral sands producer operating in Sierra Leone reported a USD2.6 million pretax loss in the first six months of 2015, narrowing from the USD3.8 million loss a year earlier.
The narrower loss was the result of the company slashing administrative and marketing expenses to USD6.0 million from USD7.7 million and because it booked a USD1.4 million gain from finances after benefiting from a foreign exchange gain, compared to booking a USD2.2 million loss a year earlier.
Earnings before interest, tax, depreciation, amortisation and exceptional items came in at USD7.2 million, down from USD8.7 million in the first half of 2014, which the company said was "very successful" when compared to the substantial drop in revenue.
Revenue experienced a fall to USD45.7 million in the first half from USD64.1 million a year earlier, pushing its gross profit down to only USD1.6 million compared to USD5.9 million.
By commodity, Sierra Rutile generated USD40.7 million in revenue from selling rutile, down from USD58.5 million a year earlier and generated USD4.0 million from the sale of ilmenite, which was also down from USD4.2 million. The rest of the revenue came from zircon and concnetrates, which fell to USD975,000 from USD1.4 million.
Rutile is used in the manufacture of of refractory ceramic, as a pigment, and for the production of titanium metal whilst ilmenite is used as a flux in blast furnaces and to manufacture titanium slag and synthetic rutile products.
By location, sales to Asia fell to USD4.0 million from USD7.0 million a year earlier, North American sales dropped to USD12.6 million from USD18.4 million, South American sales declined to USD286,000 from USD884,000.
Most notably, sales to the Middle East and North Africa plummeted to USD458,000 from USD26.7 million a year earlier, partially offset by sales to Europe experiencing the only revenue rise in the period to USD28.3 million from USD11.0 million.
Capital expenditure in the half totalled USD10.3 million, of which USD7.9 million was spent on the construction of the Gangama mine in Sierra Leone. That compares to the company's expenditure of USD6.8 million a year ago.
At the end of the half, Sierra Rutile reported a cash balance of USD9.0 million, up from USD6.6 million at the end of December.
Sierra Rutile shares were down 5.6% to 21.00 pence per share on Thursday.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
SRX.L