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ASX-listed platinum producer Zimbabwe Platinum Holdings saw its revenue for the half-year to December 31, 2018 rise by 2% to US$291,8 million from the prior comparable period as metal prices improved during the period.

There was a 1% increase in both metal prices and 4E sales volumes.

Gross revenue per platinum ounce for the half year at US$2 186 was 1% higher than the US$2 154 reported during the same period last year.

Cost of sales at US$187,1 million was 2% higher than the same period last year’s US$184 million mainly due to inflation.

“This was partly offset by the substitution of open-pit ore with lower cost underground ore following the closure of the South Pit Mine in April 2018 and decrease in depreciation arising from the conversion of upper ores resources to reserves,” said CEO Alex Mhembere today.

As a result, gross profit margin of 36% was the same as the prior comparative period.

Administrative expenses for the half year at US$28,1 million were 22% higher than the US$23 million reported during the same period last year mainly due to higher insurance premiums in the current period.

Selling and distribution expenses for the half year at US$1,1 million were 80% lower than same period last year due to the decrease in transport cost in line with the volume of material moved as no concentrates were exported in the current half year. Transportation of concentrates typically costs more than transportation of matte.

Royalty and commission expense for the half year increased by 74% from US$7 million reported in the same period last year to US$12,2 million due to increase in royalty rates after migrating from a special mining lease to a mining lease on 31 May 2018.

Mhembere said the period under review benefited from export incentive of US$29.4 million (2017 comparative: US$5,6 million) and the recognition of a US$9.6 million refund due from the Zimbabwe Revenue Authority (ZIMRA).

“The refund arose from a court ruling in favour of the Group in respect of fines inappropriately levied by ZIMRA on the disputed customs duty rebates case,” said the CEO.

Cash operating cost per platinum ounce produced improved by 3% to US$1 295 from US$1 331 reported in the same period last year due to the substitution of open-pit ore with lower cost underground ore, decrease in selling expenses as detailed above and lower cost of consumables sourced from South Africa which benefitted from the weakening of the South African Rand against the United States Dollar.

Resultantly, profit before income tax for the period at US$98, 5 million was 60% higher than US$61,4 million recorded in the same period last year.

Income tax for the half year at US$18.1 million (2017 comparative: US$40,3 million) resulted in a profit after tax for the period of US$80.4 million compared to US$21 million achieved in the same period last year.

At the end of the half year, Zimplats had bank borrowings of US$62,5 million.

Production

The group reported platinum production for the half year decreased by 1% to 135 430 ounces from 136 152 ounces in line with the decrease in the volume of ore milled. 4E metal production for the half year also decreased by 1% to 273 655 ounces from 275 224 ounces in line with mill volumes.

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