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(Alliance News) - Harvest Minerals Ltd on Friday reported a profit and a revenue boost in 2022, but cut sales guidance for 2023, noting the year was proving difficult due to uncertain market conditions.
Shares in Harvest, a London-based fertiliser producer, dropped 36% to 3.00 pence in London on Friday morning.
Harvest said it swung to a pretax profit in 2022 of USD472,580 from a loss of USD4.2 million the previous year. Profit was boosted by a reduction in expenses to USD658,438 from USD1.2 million the year before.
Revenue from fertiliser sales shot up 76% to USD8.6 million from USD4.9 million the year prior. The company said a total sales volume of 117,000 tonnes of KP Fertil had been sole, a 38% increase from 85,030 tonnes sold in 2021.
Harvest minerals swung to earnings before interest, tax, depreciation, and amortization of USD1.4 million in 2022 from a loss of USD3.9 million the year prior. This stemmed from the loss on impairment narrowing to USD509,604 from USD3.3 million the year before.
Net assets of the company were up 13% at USD9.7 million, up from USD8.6 million the year before, and Harvest Minerals' cash position rising 59% to USD2.7 million from USD1.7 million.
The company also posted its results from the first six months of 2023 and provided an update on its second quarter, stating that it had sold 27,000 tonnes of fertiliser in the first half, against its 60,000 tonnes budget.
Harvest Minerals said that another 33,000 tonnes of fertiliser invoices in 2022 would be in its 2023 revenue.
Fertilizer demand was expected to improve, but the company revised its 2023 invoiced sales down by 40% to 120,000 tonnes from its target of 200,000 tonnes given the continued market uncertainties.
"Although Harvest's operational costs have not been impacted by the higher energy prices as its solar plant supplies the vast majority of its power needs, the company is reducing the price of its fertilizer to follow the market and trigger the farmers to start buying," said Harvest Minerals.
"2023 is providing to be a somewhat complex year," said Chair Brian McMaster.
"While ultimately, we expect fertilizer demand to improve as the year progresses, given the level of uncertainty, we have reduced our invoiced sales target from 200,000 tonnes to 120,000 tonnes. When the market picks up as we envisage, we are positioned to continue building market share."
By Will Neill, Alliance News reporter
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