Jubilee Metals’ interim profit more than halved as the metals-processing company grapples with the power crisis in SA and delays in Zambia.
The company, valued at R4.5bn on the JSE, on Monday reported in its results for the six months to end-December that operating profit fell 45.9% to £4.66m (R105.58m) and profit more than halved to £4.07m.
“Infrastructure in SA, as the largest supplier of chrome to the ferrochrome industry, remains under pressure, which is expected to continue in the medium term,” said the company, which also operates in Australia, Mauritius, Zambia and the UK.
Last month, Jubilee lowered its full-year guidance of platinum group metals (PGMs) ounces to 38,000, from 41,586oz in 2022, due to the energy crisis in SA and the time lag in installing backup power.
“In SA, Jubilee continued to invest in securing further PGM-bearing resources and as a precautionary measure against potential increased power outages, elected to increase its processing stock for its PGM operations while implementing backup power units at its chrome operations,” it said.
Jubilee is listed on the alternative exchanges to the JSE and in London. It has steadily grown its PGMs business in SA over recent years and made two acquisitions in 2019, adding the Inyoni chrome and PGM business, as well as the Sable refinery in Kabwe, Zambia, to advance its metal diversification and spread its geographic risk.
In Zambia, the construction of the Roan copper concentrator suffered delays due to power and water disruptions. Production was ramped up in late February after $2.5m more was spent on the plant and equipment.
“These external challenges have effectively prolonged the Zambian development and ramp-up timeline by an estimated five months, with ramp-up now progressing and expected to reach full output and commercialisation by May 2023,” Jubilee said.
Meanwhile, it is also dealing with lower PGM prices, reflecting the global slowdown of most major economies. This resulted in revenue from PGM, which with chrome generates more than 90% of revenue, falling 11% year on year per ounce.
Total PGM production fell one-tenth to 18,208oz. Chrome production rose 2% to 634,111 tonnes, and chrome revenue per ounces increased 12%. Copper produced and sold fell 13% and 29% respectively.
PGM and chrome is the only segment of the business that makes a profit as copper and cobalt operate at a loss.
Gross profit is down more than a quarter year on year to £14.31m as lower sales and higher cost of sales rose.
No dividends were declared.
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