TSL records $105,01 million PAT

AUSTRALIAN gas and oil firm, Invictus Energy Limited (IEL) is still far from starting operations on its Cabora Bassa Project nearly 28 months after it started operating in the country.

The Cabora Bassa Project encompasses the Muzarabani Prospect, a multi-TCF (trillion cubic feet) and liquid rich conventional gas-condensate target, which is potentially the largest, undrilled seismically defined structure onshore Africa.

However, presenting at the Stockhead video conference Oil & Gas – Buying the bounce, in Australia yesterday, IEL managing director Scott Macmillan revealed that the company was still well off from realising the Cabora Bassa Project.

This is evidenced by a share subscription agreement to raise the equivalent of AUD0,44 million with a local boutique investment firm to raise capital for the project as well as a 25% cut to board and management fees in May.

Also, in the presentation, it was revealed that IEL was nearing completion of a production sharing agreement with the government over the company’s oil and gas project in Zimbabwe.

Macmillan said IEL was now targeting southern Africa as a potential market for

ANGLO American Platinum (Amplats) said second-quarter production of platinum group metal (PGM) fell by 41% due to shutdowns in South Africa and Zimbabwe caused by the coronavirus crisis, and warned headwinds put its full-year guidance at risk.

The Johannesburg-listed miner, one of the world’s largest platinum producers, yesterday said total PGM production for the quarter was 665 100 ounces, down 521 600 ounces.

It saw potential headwinds during the second half of the year due to plant repairs, continued power cuts and from intensified impact from the spread of the gas to power opportunities.

“Huge electricity shortfall in the region with >15 000 MW (megawatt) of new generation capacity required, existing petrochemical demand exists in South Africa through Sasol’s Secunda facility. Currently, supplied from onshore Mozambique Pande-Temane fields and coal to liquid technology.

“Zimbabwe and Zambia are large agriculture-based pandemic.

“Our priorities remain to ensure the safety of our employees and the integrity of our assets and caution that these headwinds could impact our ability to meet full year guidance,” the company said in a statement.

State utility Eskom, which generates the vast majority of South Africa’s power, implemented planned outages that began on Friday and warned that it could not say how long the new round of power cuts would last.

Full-year PGM production is expected to be between 3,1 and 3,6 million ounces, including platinum production of between economies and significant producers of tobacco and maize,” he said.

“Most fertiliser is imported from South Africa. Invictus has signed a gas sale MoU (memorandum of understanding) with Sable Chemicals for 70 million standard cubic feet per day for 20 years. Sable rail ammonia gas from South Africa to their facility in central Zimbabwe. Industrial demand in South Africa is serviced from onshore Mozambique.”

Macmillan added: “Top 10 industrial gas users in South Africa contribute over ZAR150 billion per annum in turnover, consume >30 billion cubic feet per year and employ 46 000 people. Significant number of mining houses (especially Zambia and the Democratic Republic of Congo) generate off grid power using diesel at 30-40c/kWh vs grid cost of 10-15c/kWh. Small-scale LNG trucked to mining operations can displace diesel at 40% of the cost”.

In addition, IEL found that Zambia and South Africa could switch to natural gas as liquid fuel consumption in the region was 880kbpd (thousand barrels per day).

“South Africa generates synthetic fuel from coal of 180 thousand tonnes per day. Remainder consists of imports of crude oil which is refined locally as well as refined products. Condensate/crude can also be exported from Beira to international markets,” Macmillan said. 1,45 and 1,65 million ounces, Amplats said.

Refined PGM production during the second quarter decreased by 67% to 407 000 ounces after phase B unit at its Anglo Converter Plant, responsible for processing and refining output, was temporarily closed for repairs during the period.

Mining companies in South Africa are anxious about managing COVID-19 and preventing outbreaks at mine sites where workers are in close quarters and confined spaces. Amplats said repairs to the processing plants of phase A unit, which was damaged during a blast, were not expected to be complete until the latter part of 2020. — Reuters

TSL Limited recorded a 2,42% decline in profit-after-tax (PAT) to $105,01 million for the half year ending April 30, 2020 as the operating environment continues to remain complex and uncertain.

In the comparative 2019 period, TSL registered a PAT of $107,62 million.

In TSL’s inflation-adjusted statement for the period under review, the firm’s company secretary James Muchando said the rapidly changing regulatory environment was further complicating business operations.

“The operating environment remains complex and uncertain. Shortages of foreign currency, fuel and electricity persist. Rising inflation continues to erode disposable incomes and consumer buying power,” he said.

“The rapidly changing regulatory environment further complicates business operations. The 2019/20 drought has left vast segments of the population food insecure and has negatively affected yields for most crops.”

He said the current low dam levels due to low rainfall would compromise both winter and summer cropping programmes.

“National tobacco volumes are expected to be between 10% and 15% below prior year volumes, while pricing is predicted to be marginally firmer,” Muchando said.

Additionally, he said the COVID-19 pandemic would have disruptive effects on the economy and thus their business forcing TSL to adopt a “moving agriculture” strategy while also watching for any emerging opportunities.

In terms of revenue for TSL, this increased to $380,09 million during the period under review from a comparative $318,33 million last year.

But, this was with mixed results from TSL’s agriculture, farming, logistics and real estate segments.

Under its agriculture segment, TSL saw “negligible tobacco revenues” recorded by Tobacco Sales Floor in the period under review owing to the six-week delay to the start of the tobacco selling season on April 29, 2020.

Muchando said TSL expected its tobacco auctioning businesses to be impacted this year given the regulations which have allowed for decentralisation of contract floors and not auction floors.

Concerning its chemical subsidiary, Agricura, there was volume growth recorded across major product lines due largely to stock availability, improved marketing efforts and better distribution through the outlet network.

“The farming operation has recorded satisfactory yields across its major summer crops tobacco, maize, soya and chillies which were largely grown under irrigation,” Muchando said.

TSL’s logistics business saw overall general cargo volumes down by 29% on prior year due to reduced fertiliser movement owing to the drought.

“Volumes in the Tobacco division are up 89% due to the extended processing from the 2019 crop. Premier Forklift has also benefited from this overspill of activity resulting in volume growth of 4%. This has in large measure compensated for the delay in the start to the current tobacco selling season,” Muchando said.