Foreign exchange losses weigh on the interim financial performance of Zimplats

Impala Platinum Group company, Zimplats, reported a 32% year-over-year decline in net profit to $170.68 million for the six months ended December 31, 2021, from net profit of 250, $61 million for the six months ended December 31. 2020.

Results were impacted by net foreign exchange losses of $21.8 million primarily from monetary assets denominated in Zimbabwean dollars due to the depreciation of the Zimbabwean dollar.

Additionally, revenue of $585 million was down 13% year-over-year, largely due to negative revenue related to raw material price fluctuations from pipeline sales following lower average metal prices compared to the second half of the previous year.

Cost of sales, at $294.9 million, was slightly lower than the previous year’s $297.4 million.

Consequently, the gross profit margin was 50%, compared to 56% for the previous comparable period.

Zimplats generated net cash inflow from operating activities of $261.3 million.

A dividend of $120 million was declared for the interim period.

Meanwhile, tonnes of ore mined fell 5% year-on-year to 3.5 million tonnes, mainly due to production interruptions at the Mupfuti mine during a change in equipment service provider trackless mining. The failover is now complete.

Tons crushed remained unchanged from 3.4 million tons in the previous interim period.

Head mill grade of platinum, palladium, rhodium, gold, ruthenium and iridium (6E), at 2.42 g/t, was 2% lower than the prior comparable period in due to a higher contribution of ore from lower grade mines.

6E production decreased 2% to 282,829 oz, due to lower 6E head grade.

In terms of Zimplats’ capital investment programs, the Bimha mine redevelopment was completed within budget at $99.8 million.

The Mupani mine upgrade is progressing on schedule with the dome and loading station earthworks completed.

The modernization of Bimha is progressing well, aiming for 3.1 million tons per year in the first quarter of the year 2024.

Meanwhile, a bankable feasibility study for the refurbishment of the mothballed base metals refinery at SMC is underway, aiming to be completed by the end of the fiscal year.

In addition, a bankable feasibility study for a proposed 185 MW solar project has been completed and an independent power producer license has been issued by the regulator.

Zimplats foresees a sustainably good operating environment and continued application of Covid-19 protocols in the future.