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Platinum group metals (PGMs) and chrome concentrates producer Tharisa on Tuesday reported “record results”, with its profit after tax more than doubling from $6-million in 2015, to $15.8-million for the year ended September 30.
This translated into basic earnings per share (EPS) of $0.05 and headline earnings per share (HEPS) of $0.06, an increase of 150% and 200% respectively from the EPS and HEPS of $0.02 posted the year before.
Based on the strong results and in line with its stated dividend policy, the board approved an inaugural distribution to shareholders of $0.01 apiece.
Group revenue totaled $219.7-million, a decrease of 11% relative to the previous financial year. This was as a result of a decrease in the commodity prices for both PGMs and chrome concentrates, with the basket price for PGMs having reduced by 16.8% an ounce and the metallurgical grade chrome concentrate price having reduced by 24.1% a tonne over the comparable period.
The reduction in revenue was mitigated by higher PGM and chrome concentrate sales volumes. PGM revenues, at $81.5-million, were almost 2% lower year-on-year, while chrome revenues were 15.6% lower at $138.1-million.
Tharisa’s mining operations are characterised by the shallow large-scale, openpit, coproduction of PGM and chrome concentrates with a consequential low cost of production.
Continuing application of Tharisa’s low cost business model and achievement of record production enabled the company to boost gross profit by 26.5% to $54.5-million for the year. The gross profit margin of 24.8% also compared favourably to the comparable period’s gross profit margin of 17.5%. Operating profit climbed by 74.5% to $32.1-million.
“Our full-year results demonstrate that the group has come of age. Improving profitability through economies of scale and operational excellence in a depressed commodity market shows that Tharisa’s low-cost model sets the group apart from its peers.
“Clearly benefiting from the innovative coproduction of PGM and chrome concentrates, the group could leverage its integrated operational platform to capitalise on the production of higher-margin specialty chrome products at a time when other commodity prices were depressed,” said CEO Phoevos Pouroulis.
Tharisa’s mining operations performed well during the financial year, with 4.8-million tonnes of reef mined, which is 15.6% higher than the reef mined in the 2015 financial year. The focus remains on grade control to improve the plant feed grades, particularly for chrome.
The processing plants performed particularly well as a result of the consistent run-of-mine (RoM) production. A total of 4.7-million tonnes of reef was milled in the 2016 financial year, representing a 5.8% increase year-on-year. The overall performance across both plants saw a marked improvement in PGM recoveries at 69.9% for the financial year and improved chrome recoveries of 62.7% during the year. Tharisa’s recovery targets are 70% for PGMs and 65% for chrome.
PGM production was 12.4% higher year-on-year at 132 600 oz and chrome production 10.8% higher year-on-year, at 1.2-million tonnes, despite marginally lower feed grades. Specialty chrome concentrate production increased by 138.8% year-on-year to 269 400 t.
OUTLOOK
The company noted that the general mining environment remained challenging but that the recovery in bulk commodity prices in the wake of increased demand meant that existing producers could look forward to improved margins in 2017.
“We are confident that we have a winning formula and have begun reaping the rewards of an improving global commodity market. The coming year will see us focus on further improvements in our recoveries and increase our attention on the next steps in our growth strategy,” said Pouroulis.
The production outlook for 2017 remains at 147 400 oz of PGMs and 1.3-million tonnes of chrome concentrates, of which 300 000 t will be specialty grade chrome concentrates.
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- [Editor:sunzhichao]
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