Trans Hex posts significant FY16 losses

JOHANNESBURG (miningweekly.com) – Diamond producer Trans Hex on Thursday reported a substantial swing into the red during the financial year ended March 31.

Headline earnings a share plunged from 78.6c in 2015 to a headline loss a share of 56.9c in the year under review, while a basic loss a share of 94.4c was reported in 2016, a significant drop on the basic earnings a share of 181.1c achieved in the prior year.

Trans Hex reported a loss for the year of R100.8-million, compared with a profit of R190.6-million in the prior financial year.

The miner swung to a loss after tax from continuing operations of R124.8-million for the year under review, compared with a profit of R169.1-million the year before, while the profit after tax from discontinued operations totalled R24-million, slightly up on the profit of R21.5-million reported in 2015.

The gross loss for the South African operations during the 12 months under review amounted to R6.8-million, compared with a 2015 profit of R161.6-million, while losses from Angola’s continuing operations reached R36.4-million, compared with a profit of R2.4-million in 2015.

Trans Hex had incurred R55.1-million in impairment charges in respect of the Lower Orange River (LOR) operations, compared with charges of R86.5-million the year before; a R13.6-million equity accounting loss from West Coast Resources; and a R15.8-million equity accounting loss from the Somiluana mine, in Angola.

The diamond miner further noted a 23.5% decrease in diamond prices during the financial year, with sales revenue falling from R939.7-million in 2015 to R671.4-million in 2016.

Sales revenue from the South African operations declined 28.6% from R939.7-million in 2015 to R671.4-million in 2016, which, in addition to 16% fewer carats sold, contributed to a 15.4% decline in sales from the LOR and shallow water operations.

Overall, production from the South African operations decreased 21.5% to 48 435 ct, owing to a 13.4% reduction in gravel treated and a 5.4% decline in average grade at the LOR operations to 1.22 ct/100 m3.

Operations at Trans Hex’s 40%-owned West Coast Resources’ Namaqualand mine, in the Northern Cape, started during the year, delivering 24 930 ct, with sales reaching R49.4-million at an average price of $208/ct.

In Angola, Somiluana mine, in which Trans Hex holds a 33% stake, produced 99 572 ct, with sales amounting to $34.2-million at an average price of $351/ct.

Trans Hex reported a net cash position at the end of the year under review of R353.5-million, less than the R407.2-million recorded at the end of the 2015 financial year.

The company did not declare a dividend for the year.