(Alliance News) - Jubilee Metals Group PLC reported on Wednesday that its annual profit more than halved as surging overhead costs put margins under pressure.
For the financial year that ended June 30, the London-based metal processing company posted a 54% slump in pretax profit to GBP12.3 million from GBP26.5 million a year earlier.
Profit margins shrank to 22% from 32%, as costs ballooned. Cost of sales grew by 17% to GBP110.5 million from GBP94.6 million. Finance costs also put strain on the bottom-line, multiplying to GBP5.2 million from GBP1.4 million.
"Shareholders will have noted that the majority of producers have suffered significant gross margin contraction, with latest quarterly results of these producers demonstrating that most are now incurring operational losses," Jubilee Chair Ollie Oliveira said.
Jubilee delivered revenue of GBP141.9 million, up slightly 1.4% from GBP140.0 million, with growth in dollar-denominated chrome revenue predominately offsetting a decrease in platinum group metal revenue.
PGM price is now trading at USD1,359 an ounce, which is 46% below the 2022 financial average and 21% below average in the 2023 financial year.
PGM production was up 2% to 42,433 ounces from 41,586 ounces. Chrome output rose by 5% to 1.28 million tonnes from 1.22 million tonnes, while copper was 5% higher at 2,728 tonnes from 2,604 tonnes.
Earnings before interest, taxes, depreciation and amortisation dropped by around one third to GBP24.8 million from GBP36.8 million.
Over 12 months, earnings per share declined by 35% to 0.48 pence from 0.73 pence, after the weighted average number of shares increasing by 9% to 2.68 million from 2.45 million shares.
"Jubilee has delivered a strong operational performance which has assisted in buffering some of the challenging market conditions, brought on by a fast-depreciating PGM basket price and infrastructural challenges in both operating jurisdictions," Chief Executive Leon Coetzer said.
The company over 12 months expanded its portfolio in South Africa and Zambia.
It said the state-of-the-art PGM processing facility boasts an annual PGM production capacity of 44,000 ounces.
The group further expanded the chrome operational footprint through the implementation of a long-term chrome run-of-mine offtake agreement, offering increased chrome margins capable of offsetting the lower PGM margins.
By Artwell Dlamini, Alliance News reporter
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Jubilee Metals (JLP)