ZIMBABWE'S largest platinum producer, Zimplats has realised $14 million in export incentives, the company revealed in its integrated annual report for 2017.
The Reserve Bank of Zimbabwe introduced a five percent export incentive scheme on all exports in
May 2016 to promote growth, productivity and development of export sector to enhance inflows of foreign currency.
"The Group was awarded a 2.5 percent export incentive amounting to $14 million on the export proceeds received in Zimbabwe during the year," said Zimplats chief executive officer Mr Alex Mhembere in the 2017 annual report.
In the 2016 financial year, Zimplats generated $1.1 million in export incentives.
During the period under review, Mr Mhembere said revenue for the year increased by nine percent from $471.8 million in the 2016 financial year to $512.5 million.
He said revenue was supported by an increase in average metal prices as gross revenue per platinum ounce improved from $1 638 to $1 868.
"Cost of sales decreased by six percent from $390.7 million in 2016 to $367.1 million largely due to the five percent decrease in sales volumes.
"Gross profit margins improved from 17 percent in 2016 to 28 percent this year mainly due to the improvement in average metal prices."
Operating cash cost per platinum ounce increased by two percent from $1 197 in 2016 to $1 225 in 2017 due to a three percent decline in platinum production (including sales in concentrate form) and an increase in prices of consumables.
Mr Mhembere also said the Government issued Zimplats treasury bills with a total nominal value of $34 million in settlement of the principal amount owed by the RBZ.
The treasury bills were disposed during the year for a consideration of $20.8 million. The amount owed by RBZ had been written off in full in prior years.
As a result of these factors, profit before tax for the year increased from $29.4 million in the 2016 financial year to $101.3 million.
The company's chairman Dr Fholisani Mufamadi said the platinum miner's contribution towards the Zimbabwean fiscus and the economic development of Zimbabwe has remained positive with the operating subsidiary procuring 73 percent of its goods and services (excluding payments to Government).
"Payments to the Government in respect of corporate tax, additional profits tax, royalties, payroll taxes and customs duties for the year increased from $62 million in the 2016 financial year to $86 million," he said.
Dr Mufamadi said in pursuit of its objective to contribute positively towards the development of Zimbabwe, Zimplats spent 83 percent of its sales proceeds in Zimbabwe.
On the outlook, he said his organisation remains committed to exploring, extracting and beneficiating its mineral resource.
"To this end, the company is investing $264 million in the development of a new mine (Mupani Mine) to replace Rukodzi and Ngwarati mines which will be depleted in 2022 and 2025 respectively.
In addition, the operating subsidiary is planning to reline and improve the existing furnace to reduce the beneficiation risk.
"The future of the company remains bright despite the pressures from the liquidity challenges in Zimbabwe and low commodity prices on the world market.
"The bright future is premised on the company focusing on maintaining sustainable business practices, achieving production volumes, containing costs and preserving its cash resources," he said.
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