Zimplats reports a sharp dip in annual post-tax profits, from US$205.5 million in June last year to US$8.2 million, but the company will soon commission two new projects that are key to future growth.
The country’s biggest platinum was forced to put some projects on ice last year to respond to a steep drop in metal prices. However, it spent US$440 million on critical projects in the year to June, spending 45% more than it did in the previous year. The continuing projects include replacing older mines, building a solar plant, and expanding processing.
Zimplats sold more minerals in the year to June, but earned less because of low prices. Sales volumes increased by 6% to 641,000 ounces of platinum group metals (PGMs), while mined volumes rose by 5%. The increased volumes and sales were however countered by low prices. Revenue fell 20% from $962.3 million at the end of June 2023 to $767.1 million in June this year.
“Resultantly, profit before tax declined to US$37.6 million (FY2023: US$286.8 million). Income tax expense at US$29.4 million was mainly driven by an increase in deferred tax expense of US$17.2 million following the change in corporate income tax rate from 24.72% to 25.75%. Profit after tax fell to US$8.2 million (FY2023: US$205.5 million),” Zimplats reports.
Despite falling profits, Zimplats has pushed ahead with some projects. These include the expansion of the smelter and sulphur dioxide abatement plant, where Zimplats has so far invested US$387 million. This project, which includes a new 38MW furnace, will increase Zimplats’ smelting capacity significantly.
“The commissioning of the expanded smelter is scheduled for the first half of the 2025 financial year.
Zimplats has also invested US$36 million on 35MW solar plant, against a budget of US$37 million. The plant is set to be commissioned in the first quarter of the 2025 financial year. Zimplats has also spent a further US$28 million, out of a budgeted US$190 million, on refurbishing the mothballed base metal refinery at Selous.
ALSO READ | ‘Winter is almost gone’: Zimplats CEO believes the worst may be over for crisis-hit platinum miners
