BNC projects decline in profitability
BINDURA Nickel Corporation Limited (BNC) has projected a decline in profitability for the rest of financial year 2024 (FY2024) due to the protracted shutdown of Trojan Nickel Mine, coupled with the low nickel prices prevailing on the global markets.
In a cautionary announcement and profit warning statement, BNC managing director Thomas Lusiyano said the decline in profitability may also have a material effect on the value of the company’s securities.
Lusiyano indicated that the financial performance of BNC during calendar year 2023, was attained against the background of a challenging operating environment, attributed to the deterioration of the Sub-Vertical Rock Winder (SVR) bull gear at Trojan Nickel Mine.
To address the deterioration problem, the company procured a replacement SVR bull gear, similar in size and duty, and initiated the SVR bull gear replacement project, necessitating a transient shutdown of Trojan from September 23, 2023.
The project was initially scheduled to be completed by October 31, 2023, but faced unforeseen technical challenges that extended its completion date to the end of next month.
Consequently, Trojan has been on shutdown for six months.
“In recognition of the foregoing, the board of directors of BNC would like to inform the shareholders of the company, potential investors, and the public, of the projected material decline in the company’s profitability for the rest of FY2024 due to the protracted shutdown, coupled with the low nickel prices prevailing on the global markets,” he said.
“Based on a preliminary assessment of the consolidated financial results, the company is projected to record a loss after taxation, during the six months ending March 31, 2024, which is 8% higher than the loss recorded in the comparative period last year.”
Accordingly, shareholders and the investing public were advised to exercise caution and to consult their professional advisers when dealing in the company’s securities, until another announcement is made by the end of next month.