Listed Nickel producer Bindura Nickel Corporation (BNC) has bagged around US$1,06 million in export incentives from the Reserve Bank of Zimbabwe's export support initiative that gave birth to the bond notes, a company official has said.
The central bank's export support initiative which started late 2016 paid producers up to 5% of the value of their exports as an attempt to stimulate exports and revamp the productive sector at a time companies were shutting down due to a myriad of challenges including lack of capital and unsustainable cost structures.
FD Jan Lampen told analysts at the company's analyst briefing on Monday that out of the US$42,3 million worth of revenue the company realised, the RBZ paid BNC 2,5% as an export incentive.
"We get 2,5 % of our turnover so you take US$45 million and you calculate that so it's about a million something if you calculate that," Lampen said.
Lampen said the after-tax profit tumbled to US$0,6 million compared to US$11,2 million in 2015 after the company suffered a 46% slump in revenues to US$42,3 million compared to US$78,9 million on account of a sharp decline in nickel prices on the international market and a slip in sales.
Earnings per share stood at 0,1 cents per share compared to 0,9 cents per share prior year. The average nickel price achieved in the year slipped 38% to US$6,737 per tonne in 2016 compared to US$10,855 per tonne the previous year.
Nickel sales decreased to 6 613 tonnes compared to 7 353 tonnes the previous year. Production at Trojan Mine fell by 9%.
Lampen said the company was concerned with its working capital position. Working capital stood at US$2,4 million in 2016 from US$11,5 million in 2015 due to an increase in prepayments to the smelter project.
"Your assets should always be higher than your liabilities and that gives you liquidity, but currently because of the smelter we have got about US$3 million sitting in pre-payments so that's a liability. It's money you have paid, but the product still has to come," he said.
In a presentation, BNC said cash generated closed the year at a negative US$2,4 million compared to US$17,9 million prior year mainly due to low nickel prices achieved during the period under review.
The miner said its smelter restart project was at 56% progress at the end of March and is now expected to be completed end of the current financial year.