Despite a 40 per cent rise in sales volumes at the half-year stage, miner Sierra Rutile's (SRX) profits still plummeted - reflecting a price slump for titanium feedstock minerals.
Average realised prices have actually halved since 2012's half-year to $1,265 (£811) per tonne, while a 5 per cent rise in rutile cash production costs, to $665 per tonne, haven't helped - that reflects a planned three-week shutdown. Accordingly, Sierra Rutile's first-half cash profit came in at $13.5m, against $66.9m a year earlier.
However, the company has made operational progress. Rutile production increased 22 per cent in the period to 51,985 tonnes, due to a contribution from Lanti Dry Mining, which achieved its nameplate capacity of 500 tonnes an hour during the period, while ilmenite by-production rose 45 per cent to 14,962 tonnes. The company also managed to add a further 39,300 tonnes of rutile, and 17,300 tonnes of zircon, to its resource base.
A $20m working capital facility has been agreed with Nedbank, too, and management has also approved a new dividend policy that aims to distribute at least 50 per cent of cash flows (net of capital expenditure and borrowing commitments).
Prior to these figures, broker Mirabaud was forecasting full-year EPS of 10.9¢ (from 16.4¢ in 2012).
| SIERRA RUTILE (SRX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 55p | MARKET VALUE: | £283m | |
| TOUCH: | 53-56p | 12-MONTH HIGH: | 81p | Low: 46p |
| DIVIDEND YIELD: | nil | PE RATIO: | 14 | |
| NET ASSET VALUE: | 37¢ | NET DEBT: | 10% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 98.7 | 56.7 | 11.0 | nil |
| 2013 | 66.4 | 3.76 | 0.70 | nil |
| % change | -33 | -93 | -94 | - |
£1=$1.56 | ||||
