ALTHOUGH weak metal prices dented Aquarius Platinum’s annual income in the 12 months to June the company’s financial performance had turned the corner with a $21 million (R226m) net cash surplus, Sibonginkosi Nyanga, an analyst with Imara SP Reid, noted yesterday.
Aquarius reported a 2 percent decline in revenue for the period under review to $233m from $237m a year earlier.
Annual group attributable production was 2 percent higher at 331 642 platinum group metal (PGM) ounces despite the impact of the strike at Anglo American Platinum on the Platinum Mile Resources (PlatMile) tailings plant.
“A key indicator to the improved performance is the $41m turnaround in net cash flows from operating activities from a deficit of $20m to a surplus of $21m in the 2014 financial year,” Nyanga said.
The Kroondal mine produced about 430 743 PGM ounces, its highest annual output since 2008.
Headline earnings improved by about $62m. The company posted a headline loss of $11m, or 1.13c a share, from a $73m loss at 8.80c a share.
“The $62m improvement in headline quarterly loss to $11m recognises the good progress that has been seen at Aquarius. However, significant price rises are still required to see decent returns,” Nyanga said.
Mimosa, the Zimbabwean based operation, produced more than 60 000 PGM ounces in the fourth quarter, a record in quarterly production by the mine, the company said.
Group mine earnings before interest, tax, depreciation and amortisation (Ebitda) fell to $30m from $35m a year earlier because of lower production at its PlatMile tailings treatment plant and lower prices.
Jean Nel, Aquarius’s chief executive, said the company was seeking growth after it improved the quality of its operations and strengthened its balance sheet in the year under review.
“Aquarius’s focus will remain resolutely on continuing to improve safety, production and cost performances across the group, while carefully assessing selected growth opportunities,” he said in a statement.
Nel said these improvements, combined with the recently increased metal prices, made it possible for the company to generate free cash for shareholders, “which as we have noted in the past, has been a neglected stakeholder”.
The Aquarius share price rallied 40 percent in April after it signalled its intention to raise $225m to fund a bond repurchase and received valid acceptances of approximately 95.36 percent.
Aquarius was unscathed by the five-month platinum belt wage strike and sealed a three year wage deal with the National Union of Mineworkers at the end of last month, signalling labour stability.
Management has said it expected to complete the sale of its non-core Kruidfontein and Blue Ridge mines by December. Production at Blue Ridge has been suspended since July 2011.
Shares jumped 2.83 percent to close at R4.36 yesterday.