2020, a tough year for Bindura Nickel Company

Bindura Nickel Company (BNC)’s revenue has decreased by 12 percent from 3002 tonnes to 2 566 tonnes.

The income statement of the company indicates that the reduction in sales volume was mainly due to a temporary stoppage in dispatches to the market from April-June 2020, a transition which the company had to go through while new marketing arrangements were being put in place following the termination of the Glencore Off-take Agreement.

In a statement, the company secretary, Conrad Fungai Mukanganga, said, the turnover decreased as compared to the previous period.

“The London Metal Exchange (LME) nickel price averaged US$13 214 per tonne, compared to US$13 927 per tonne achieved in the prior year. The 5% decline translated into turnover for the half-year of US$25.0 million (2019-US$28.3 million),” said Mukanganga.

The revenue decrease due to the fall in the cost of sales by 2%, gross profit decreased by 31% and the profit and comprehensive income decreased by 43%.

He said the decrease in profitability was mainly attributable to the decline in sales and net foreign exchange gains recognised in the prior period amounting to US$4.1 million, versus a net exchange loss of US$1.6 million realised in the period under review.

However, current liabilities have increased by 34% due to an increase in trade and other payables. Current assets have also increased by 46% as a result of an increase in trade, receivables and inventory.

The company secretary added that ZWL$2,5 million commitment was fulfilled due to Bondholders at the March 2020 interval.

Meanwhile, the company continued to maintain overdraft facilities in order to finance its working capital requirements.

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