After finally moving into production, the Korean recycling plant of ZincOx Resources ran into a number of “teething problems” that hampered the initial ramp-up at the facility, but following remedial actions the company is confident that targeted throughput will be achieved by the end of this year. And though ZincOx’s financial performance is largely academic at this stage, its half-year report did reveal that the recycling plant managed to generate a cash profit even when operating at just 70 per cent capacity.
A succession of technical problems linked to the plant’s furnace and heat exchanges were to blame for the delays, but given the complexity of the recycling process it would have been unrealistic to expect that the transitional phase from development to production would go off without a hitch. Nevertheless, since the half year-end, the plant hit its zinc recovery target of 94-99 per cent.
We will get a more meaningful idea of ZincOx’s financial performance during the first six-months of next year. During the period under review, operating losses increased 72 per cent to $8.84m (£5.46m), while headline earnings were in the black due to $10.5m accounting gain on its Jabal Salab subsidiary.
Analysts at finnCap anticipates a full-year loss per share of 12.4¢, before turning positive to 11.3¢ a share in 2013.
| ZINCOX RESOURCES (ZOX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 50.75p | MARKET VALUE: | £45m | |
| TOUCH: | 51.5-53p | 12-MONTH HIGH: | 82p | LOW: 46p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 109¢* | NET DEBT: | 39% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 1.28 | -5.76 | -4.46 | nil |
| 2012 | 1.31 | 0.38 | 1.12 | nil |
| % change | +3 | - | - | - |
*Includes intangible assets of $14.4m, or 16¢ a share | ||||
