Trans Hex expects to swing to FY loss, warns of earnings crunch
Diamond explorer Trans Hex, which is currently finalising its results for the year ended March 31, said in a trading statement last week 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 per share were expected to narrow from 79.7c to 20.7c, and headline earnings per 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 the 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 due 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.
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