JOHANNESBURG (miningweekly.com) – Diamond explorer Trans Hex, which is currently finalising its results for the year ended March 31, said in a trading statement on Monday that it expected to report an improved net profit for the period of R22.7-million, from R85.4-million in the prior fiscal year.

The Johannesburg-listed miner also expected to report a loss after tax from continuing operations of R5.1-million, swinging from a profit of R65-million in the prior financial period.

Similarly, earnings a share were expected to narrow from 79.7c to 20.7c, and headline earnings a share from 69.9c to 9.8c.

Looking to production, Trans Hex narrowed its South African diamond output for the period from 67 115 ct to 52 081 ct, owing to a 14.9% decrease in volume treated as a result of the termination of joint venture contractors and a 21-day strike over pay increases by members of the National Union of Mineworkers.

A 12% drop in grade as a result of grade underperformance during the first six months of the year also impacted on production.   

Sales revenue decreased by 7.4% from R751.3-million to R695.7-million in the period under review as a result of a 15.7% decrease in carats sold and a 7.2% decrease in average prices.

“The average price decrease was owing to fewer ‘special’ stones being recovered during the first six months of the year,” the company stated.

Revenue was, however, positively affected by a 14.4% weakening in the rand.

South African operations generated a loss before tax of R8.9-million for the period, compared with profit of R88.2-million in the prior year.

The cost of goods sold increased from R605.2-million to R653.7-million, mainly owing to stock movement of R32.7-million and a 2.5% increase in operating costs.

Production at Somiluana, in Angola, amounted to 72 041 ct during the period, while sales totalled $32.4-million.

Somiluana’s operating margin was 32% and the mine generated net profit of $10.5-million, while net cash generated during the period was R14.2-million, resulting in the group’s net cash position at the end of the period being R397.6-million.

Trans Hex expected to release it full financial results on June 2.