Caledonia sees reduced profits due to higher costs
Victoria Falls Stock Exchange (VFEX) listed mining firm, Caledonia Mining Plc has forecast depressed full-year profitability weighed by increased operating costs at its Gwanda-based Blanket Mine, consisting of higher than expected overtime payments and power costs.
According to the group, this includes several significant one-offs and non-operating costs incurred during the fourth quarter period, which are expected to have a knock-on effect on profitability for the full year to December 31, 2023.
Group chief executive officer Mr Mark Learmonth said the performance at Blanket Mine remained solid for the fourth quarter, but higher operating and financing costs, as well as a one-off impairment charge related to a tax refund claim at the gold operation’s solar project, hit the company’s bottom line.
“It is regrettable that, at a group level, we have been adversely affected by a series of higher-than expected costs in the second half of 2023 which have had a negative effect on the full year profitability,” said Mr Learmonth in an update for the year.
“The performance of Blanket Mine remains strong and, notwithstanding some unforeseen overtime and power cost issues in the second half, has met guidance and produced a robust performance for the second half of 2023,” he said.
However, Caledonia is also upbeat a significant portion of the cost increases will not extend into 2024, while year-to-date production and costs at the Gwanda-bsed mine is within expectations of full-year guidance so far.
Additionally, the resources group is also introducing measures aimed at reducing electricity costs over the medium term.
“A number of the other cost items are not anticipated to be recurring, whereas others have arisen from our decisions to invest in the business, most notably around personnel and advancing the Bilboes sulphide project.
“I am confident that many of these will not recur in 2024 which has started positively and I look forward to the future with optimism as we pursue our goal of becoming a multi-asset production company,” said Mr Learmonth.
Caledonia has said that its operating and financial results for the quarter ended December 31, 2023 will be published on or before March 28, 2024.
Meanwhile, as at December 31, 2023, the company had cash on hand of US$6,7 million and overdrafts and term loans of $17,7 million
https://www.herald.co.zw/caledonia-sees-reduced-profits-due-to-higher-costs/