Sentula Mining profits fall

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Sentula Mining (SNU) on Thursday reported headline earnings per share of 8.5 cents for the six months ended September 2012 - down 20% from 10.6 cents a year ago.

Adjusted HEPS‚ adjusted for BEE share-based payment and transaction expenses of R16.4 million‚ increased by 7% to 11.3 cents.

The group said revenue was down 13% to R1.175 billion‚ but profit for the period amouned to R29.3 million after a loss of R230.3 million a year ago.

The company said the weaker rand impacted positively on revenue from Geosearch’s foreign operations and currency gains of R6.3 million were recognised.

It incurred expenses of R16.4 million associated with the first phase of the group’s BBBEE transaction.

In addition there were legal and forensic costs of R4.4 million incurred in support of civil actions associated with the funds misappropriated in 2008 financial year and losses of R24 million resulting from the early termination of the Vanggatfontein contract and the closure of Megacube’s operations.

It also incurred restructuring cost of R3.6 million associated with the downsizing of Geosearch’s SA exploration drilling business and a provision of R9.5 million for possible inventory obsolescence in Geosearch.

CEO Robin Berry said despite the considerable challenges being experienced in the South African mining sector‚ Sentula continued to work at stabilising earnings from its local earthmoving entities in the face of considerable volatility.

Sector specific economic and industrial action‚ in the local platinum industry‚ have led to a reduction in exploration expenditure‚ which in turn has resulted in an inevitable restructure and downscaling of the group’s SA exploration drilling business.

“The diversity of Sentula’s earnings should nonetheless continue to support the resilience of the group’s underlying revenue base. The recently announced partnership with Thebe Mining Resources Proprietary Limited‚ as the group’s strategic broad-based black economic empowerment partner‚ in conjunction with the Anglo American Khula Mining Fund and Sentula’s employee and community trusts‚ will enhance the preservation of current contracts and the award potential of new tender opportunities for the group‚” said Berry. - I-Net Bridge


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