New Zimbabwe.com

Rio Zim in $11 million loss

GOLD producer Rio Zim has recorded an operating loss of $11 million while the group’s after tax loss increased by a massive 400% in the year ended December 31 2014.
In its audited abridged group results released Tuesday, Rio Zim said the economic environment in the country remains “fragile with an unsustainably high cost of debt”.
“The group’s revenue declined by 38% and resulted in an operating loss of $11.0 million against the prior year’s operating profit of $2.1 million. The group’s underperformance was due to low production volumes at ENR (Empress Nickel Refinery) as a result of short supplies of matte.
The loss position was further exacerbated by high finance costs of $9.4 million (2013: $9.9 million) and resulted in a net loss of $18.5 million (2013: $4.7 million),” board chairperson Levy Chihota said in the statement.
“In 2014 ENR received less than 30% of its annual contracted matte supplies and operated at less than 25% capacity which resulted in substantial operating losses”.
“Base metals production decreased by 52% in volume terms to 2 915 tonnes (2013: 6 114 tonnes) resulting in revenue dropping by 49% to $40 million from last year’s comparative period of $78.7 million. While the Refinery remains in a technically stable condition, the insufficient matte supplies resulted in it operating at a trading loss.
“Gold production at Renco increased by 6% from 613kgs in 2013 to 648 kgs in 2014. The increase in production was as a result of improved ore milled and plant recoveries.
However the increased production was neutralized by the weakening gold price resulting in a decrease in revenue of 4% from $27 million in prior year to $25.9 million,” said the group.
The group said it remains strategically focused to return to sustainable profitability, and has lined up initiatives which if successfully implemented will help turn the group’s fortunes around.
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