These full-year from Sierra Rutile (SRX) demonstrate just how profitable miners can be that successfully ride the boom in commodity prices. Revenue from mineral sands soared 226 per cent to $179m (£118m) in 2012, while group cash profit grew to $108m from just $0.1m in 2011.
Rising prices for ilmenite and rutile - the company's key goods that are used as feedstock for titanium dioxide - were central to that strong performance. Revenues per tonne of production averaged $2,041 in 2012, up from $662 a tonne in 2011, as markets improved and legacy contracts expired. Certainly, rising production was another factor - rutile output rose 39 per cent over the year to 94,493 tonnes.
As prices climbed, so did Sierra Rutile's share price - from around 12p in May 2011 to 80p in August 2012 - although the shares dipped towards the end of last year as the red hot market for ilmenite and rutile softened. It seems that several directors saw that recent price decline as a buying opportunity. Chairman Jan Castro, for example, has been the biggest buyer - he added 768,750 shares at prices between 49.8p and 60p. While directors Mike Brown, Richard Lister and Michael Barton all made smaller purchases at around the same price range.
RBC Capital Markets expects EPS of 10¢ for 2013 (2012: 16¢), rising to 22¢ in 2014.
SIERRA RUTILE (SRX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 66p | MARKET VALUE: | £336m | |
| TOUCH: | 64-67p | 12-MONTH HIGH: | 84p | LOW: 46p |
| DIVIDEND YIELD: | nil | PE RATIO: | 6 | |
| NET ASSET VALUE: | 36¢ | NET DEBT: | 14% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
| 2009 | 37.0 | -7.60 | -3.10 | nil |
| 2010 | 44.0 | -13.8 | -3.20 | nil |
| 2011 | 55.0 | -27.6 | -5.60 | nil |
| 2012 | 179 | 84.4 | 16.4 | nil |
| % change | +225 | - | - | - |
£1=$1.52 | ||||
