(Alliance News) - Sylvania Platinum Ltd on Tuesday said it recorded a sharp quarter-on-quarter earnings rise, despite suffering a production fall due to local protests and droughts.
In the first quarter ended September 30, net revenue rose by 54% to USD31.2 million from USD20.2 million recorded in the fourth quarter of previous financial year. Earnings before interest, depreciation and amortisation more than doubled quarter-on-quarter to USD19.2 million from USD9.3 million.
At the Sylvania Dump Operations - its seven South African platinum group metal recovery plants - production declined quarter-on-quarter. During the period, 20,797 ounces of platinum group metal was produced, down 4.6% from 21,789 ounces.
Sylvania said its operations in Steelpoort, in the northern province of Limpopo, was hurt by protests by locals who were demanding employment and commercial opportunities.
Production in Lesedi and Tweefontein, both located in the province of Gauteng, was disrupted by severe droughts following the end of the dry season.
Another challenge, Sylvania added, was "managing cash holding in the face of rising costs of doing business such as electricity, labour and taxes."
Chief Executive Terry McConnachie said: "I am pleased to say that the SDO achieved another solid production performance in the first quarter of our financial year towards our annual guidance of 74,000 to 76,000 ounces. Recovery efficiencies improved well to 59.46% and are attributable to a combination of the Mooinooi MF2 circuit running for a full quarter, improved feed stability and circuit configuration at Lesedi and higher flotation mass pull philosophy at some of the operations. This recovery figure will taper off to an expected rate of around 52% going forward due to a lower flotation mass pull which will be required to address concentrate quality and payability.
"We continue to maintain a good cash holding due to the fourth quarter's pipeline and a healthy basket price. However, we are ever mindful of the payment of tax on revenue which increases in line with our earnings and because of this, we will continue with tight cost controls to ensure the company can meet its tax obligations as well as continue to internally fund further capital expenditure and the payment of dividends."
Sylvania's stock was trading 2.2% higher at 37.80 pence each in London on Tuesday afternoon.
By Eric Cunha; ericcunha@alliancenews.com
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Sylvania Platinum (SLP)