By Alois Vinga
BINDURA Nickel Corporation (BNC) Limited has advised its shareholders to brace for a decline in the company’s financials which will see the company recording a net loss after taxation.
A statement issued by the company’s management board confirmed the impending catastrophe.
“The company is expecting to record a significantly reduced net profit after taxation or a net loss after taxation for the year ended 31st March 2020 versus the net profit after taxation that was originally expected for the same period in terms of the company’s profit forecasts as well as versus the net profit realised in the comparative period last year,” BNC said.
The audited annual results of the company for the year ended 31 March 2020 are expected to be announced to the public on 31 July 2020.
“In the meantime, shareholders and other stakeholders are advised to exercise caution when dealing in the company’s securities until a full announcement is made,” BNC added.
However, market watchers are optimistic that the company will soon be back on a positive income trajectory since ASA resources, which previously controlled 74.73%, sold its stake to business tycoon, Kuda Tagwirei.
Tagwirei is expected to inject the much needed US$500 million for capital expenditure to increase production.
BNC suspended a project to revive its smelter due to reducing nickel prices which were too low to justify the investment.
Since the project began in 2015, nickel prices have averaged US$12,000 per tonne, according to the company’s last earnings report.
However, BNC has said it needs a nickel price of US$16,200 per tonne for the project’s investment to deliver returns.