RioZim announces first profit since dollarisation

Resources group RioZim reported a net profit for the first time since dollarisation, of $2.5 million in the full year to December 31, 2016 from $8.8 million loss in the preceding year on increased revenue and cost containment measures.

“Despite the challenging and uncertain operating environment, the Group managed to increase its revenue by 15 percent whilst cutting administration costs by 24 percent. Together, these developments have reshaped the Group, providing a strong foundation for future growth,” chairman Lovemore Chihota said yesterday.

The Group’s revenue grew by 15 percent from $56.5 million in the preceding year to $65.2million, despite Empress Nickel Refinery (“ENR”) remaining under care and maintenance.

Gross profit increased from $14.4 million recorded in the previous year to $21.3 million on increased revenue.

Operating profit of $7.5million was achieved in the period from an operating loss of $150 000 previously.

Total asset valuation increased by 10 percent from $112.4 million recorded in the previous year to $123.8 million.

Chihota said the group benefited from the debt restructuring carried out in 2016, under which RioZim sold its $34 million debt to the Zimbabwe Asset Management Corporation (Zamco).

The deal resulted in net finance costs reducing by 20 percent from $6.7 million in the previous year to $5.4million.

Chihota said Cam & Motor’s gold output almost doubled in 2016, to 856 kilogramme from 450kg in the prior year.

However, Renco Mine experienced a 4 percent decrease in gold output to 712kg from 749kg in 2015 owing to the mine’s complex ore body.

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