Zimplats, Zimbabwe’s largest platinum producer, has reported a dramatic decline in its annual post-tax profits, plunging from US$205.5 million in June last year to just US$8.2 million this year.
The sharp decrease is attributed to a steep drop in metal prices, which forced the company to halt some of its projects.
Despite the profit drop, Zimplats has invested heavily in key infrastructure to secure future growth. The company spent US$440 million on critical projects during the financial year ending June, marking a 45% increase in spending compared to the previous year. These projects include replacing aging mines, expanding processing capacity, and constructing a new solar plant.
While Zimplats increased its sales volumes by 6% to 641,000 ounces of platinum group metals (PGMs) and mined volumes by 5%, the company still experienced a revenue decline from US$962.3 million to US$767.1 million due to the low metal prices.
Consequently, profit before tax dropped to US$37.6 million from US$286.8 million the previous year. The increase in corporate income tax, driven by a rate hike from 24.72% to 25.75%, further eroded profits, resulting in a significant fall in post-tax earnings.
However, Zimplats remains committed to its growth strategy. The company has invested US$387 million in the expansion of its smelter and sulphur dioxide abatement plant, which includes a new 38MW furnace set to significantly boost smelting capacity by the first half of the 2025 financial year.
Additionally, Zimplats has allocated US$36 million to a 35MW solar plant, with commissioning expected in the first quarter of 2025. The company is also refurbishing the mothballed base metal refinery at Selous, having already spent US$28 million out of a budgeted US$190 million.
These strategic investments position Zimplats for long-term growth, despite current financial challenges.
Source: NewZwire
