BSE1 Sep 2016 10:15
Base Resources Ltd on Wednesday said a significant lift in revenue during its recently completed financial year was not enough to stop its loss ballooning, as higher finance and other costs dragged the mineral sands producer deeper into the red.
Base shares were untraded at 9.0 pence per share on Wednesday.
The company, which is focused on the Kwale project in Kenya, reported a 16% rise in revenue in the financial year to the end of June to USD169.0 million from USD145.5 million the year before, as sales of ilmenite, rutile and zircon hit the upper end of Base's guidance and production increased from last year.
Production of ilmenite rose to 455,870 tonnes from 427,655 tonnes in the previous year, rutile production increased to 85,654 tonnes from 71,537 tonnes, and zircon production experienced a lift to 31,389 tonnes from 22,416 tonnes.
Sales of ilmenite during the year were more than production, rising to 480,538 tonnes from 373,046 tonnes in the previous year, with sales of rutile and zircon coming in line with production. Rutile sales amounted to 85,536 tonnes, up from 76,801 tonnes, and zircon sales rose to 33,062 tonnes from 21,287 tonnes.
The increase in sales was partly offset by lower prices, averaging USD205 per tonne of product compared to USD256 per tonne last year. The average cost of product sold was reduced to help counter the price falls, averaging USD105 per tonne from USD130 last year.
Overall, that led to gross profit of USD35.4 million in the year compared to a profit of USD30.8 million previously.
The other costs across the rest of the business were generally higher in the year and ultimately led to the pretax loss coming in much wider than the previous year.
Corporate and external affair costs rose to USD11.3 million from USD10.8 million, selling and distribution expenses increased to USD4.1 million from USD2.4 million, and other costs increased to USD2.7 million from USD262,000, with community development costs being the only segment not to increase in the year, managing to remain broadly flat.
The profit before financing costs and tax, as a result, came in only a touch higher year-on-year at USD13.4 million from USD13.3 million.
Higher financing costs of USD34.3 million compared to the USD29.3 million last year was the final cost to ultimately see Base report a wider pretax loss for the year of USD20.9 million from the USD16.0 million loss a year earlier.
Cash at the end of the year stood at USD36.3 million, falling from USD40.9 million at the end of June 2015, but net debt has been reduced significantly to USD192.1 million from USD241.0 million at the end of June 2015.
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