Sierra Rutile Ltd Friday said its pretax profit fell significantly in its full year 2013 as revenues fell and costs increased despite a jump in production during the year.
The titanium feedstock minerals company, with operations in Sierra Leone, said its pretax profit fell 88% to USD10.5 million in 2013 from USD84.4 million the previous year, as revenues fell 31% to USD123.4 million from USD179.1 million in 2012.
The company said its revenues fell due to weaker pricing obtaining, including a 49% fall in the average price of rutile in 2013 of USD1,044 per tonne from USD2,041 per tonne in 2012.
Sierra Rutile added that its cost of sales increased 19% to USD93.1 million from USD78.3 million the previous year as it ramped up operations and sold a greater volume of rutile, increased production and shipping costs, and increased depreciation charges during the period.
However, in January the company said it achieved record full-year 2013 rutile production of 120,349 tonnes, a 27% increase on the previous year following a 12% increase in production to 36,059 tonnes for its fourth quarter compared to the third.
The company said its full-year ilmenite production increased 47% to 32,349 tonnes compared to the previous year, and it saw a 13% increase in its fourth quarter to 9,231 tonnes compared to the previous quarter.
Rutile and ilmenite are used to produce titanium metals and dioxide, widely used as base pigments in paint, paper and plastics.
Sierra Rutile announced in January its full-year 2014 production guidance of 131,000 tonnes of rutile and 28,000 tonnes of ilmenite at an all-in operating cost, including overheads and forecast sustaining capital, of USD605 per tonne of rutile.
The company added on Friday that despite challenging market conditions, it is continuing to plan further efficiency movements, and noted that its Gangama Dry Mining project is now fully-prepared for implementation pending the right market conditions.
Sierra Rutile shares were down 1.0% to 52.00 pence Friday.
LONDON (Alliance News)