24th Aug 2015 07:45
LONDON (Alliance News) - Sylvania Platinum Ltd Monday said it swung to a small pretax profit in the last financial year after it achieved "record" production levels that exceeded its guidance for the year.
But, despite swinging to profit, the company said it decided not to pay a maiden dividend due to the difficult market conditions.
The platinum group metal miner operating in South Africa swung to a USD3.6 million pretax profit in the last financial year ended June 30, from a USD2.9 million loss a year earlier as revenue experienced a small lift to USD47.8 million from USD47.2 million.
The profit derived from an improved margin as its cost of sales fell despite revenue rising, leading to a gross profit of USD6.5 million compared to USD4.3 million, alongside lower general and administration costs of USD3.2 million compared to USD4.0 million a year earlier.
Sylvania also booked a USD1.3 million impairment in the last financial year which was not repeated.
Production in the year totalled 57,587 ounces of platinum group metals and gold, up 7% from the 53,808 ounces produced a year earlier. All of the production comes from its dump operations, which is comprised of seven chrome tailings processing complexes.
The company said full year production was a record, and also exceeded its guidance. At the start of the financial year, the company had a target to produce 53,000 ounces, but this was upgraded in the third quarter to 55,000 to 57,000 ounces.
The increase in production was partially offset by lower prices, which fell by 12% year-on-year to around USD1,072 per ounce from USD1,224 per ounce. In terms of costs, its feed tonne cash cost rose 3% to USD32 per tonne, but its cash cost per gold and PGM ounce fell 9% to USD603 per ounce.
In 2016, Sylvania is aiming to produce 55,000 ounces at a cash cost under USD700 per ounce.
"Sylvania has seen record PGM ounce production for the second consecutive year," said Chief Executive Terry McConnachie. "The 2015 financial year has seen difficult market conditions in the platinum sector. We have faced these challenges by creating a more stable production environment through continuous production and technical focus as well as improvement initiatives across all operations."
Capital and exploration expenditure in the year totalled USD4.0 million, down 27% from USD5.5 million a year earlier and in 2016 this will fall to around USD3.0 million.
"Given the adverse market conditions, the board has decided not to pay its maiden dividend at this time but intends to do so when the sector improves, in line with its dividend policy," it said.
At the end of the year, the company reported a cash balance of USD8.4 million, which is up 58% from the USD5.3 million balance at the end of the last financial year.
Sylvania Platinum shares were up 1% to 10.35 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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