Base Resources - Full Year Results to 30 June 2016
Base Resources (ASX:BSE) has announced its full year results for the year ended 30 June 2016. The Company recorded a 445% increase in free cashflow to $46.7m for the year, following a 16% increase in revenue to $169m. Base's Kwale operations are in the lowest quartile of mineral sands producers, with a revenue to costs ratio of 2:1. Following a restructure as well as repayments, net debt is down 20% to -$192.1m.
Base Resources Limited (ASX & AIM: BSE) (“Base Resources”) is pleased to release its full year results for the reporting period to 30 June 2016, with the following highlights(1).
- Sales volumes of 480,538 tonnes of ilmenite, 85,536 tonnes of rutile and 33,062 tonnes of zircon, representing the top end of the guidance range.
- Sales revenue was $169.0 million, achieving an average price of product sold (rutile, ilmenite and zircon) of $282 per tonne, or US$205 per tonne, (2015: $309 per tonne or US$256 per tonne). Lower average sale prices reflect the challenging market conditions faced by mineral sands producers for much of the reporting period.
- Total cost of goods sold increased to $86.6 million (2015: $73.3 million) driven largely by the 27% increase in sales volume, at an average cost of $144 per tonne, or US$105 per tonne of product sold, (2015: $155 per tonne or US$130 per tonne). The reduction in operating costs per tonne produced to $121 per tonne, or US$88 per tonne, (2015: $124 per tonne or US$103 per tonne) is reflective of a sharp focus on cost management.
- The Kwale Operation achieved a revenue to cost of sales ratio of 2:1, comfortably positioning it in the first quartile of mineral sands producers.
- Cash flow from operations was $78.6 million for 2016 (2015: $38.2 million), higher than Group EBITDA, predominately driven by a decrease in receivables of $10.9 million during the reporting period, associated with $10.3 million of Kenyan operational VAT refunds and timing of sales receipts.
- Free cash flow of $46.7 million contributed to the overall reduction in net debt of $48.9 million. Repayments of $31.7 million (US$23.5 million) were made against the Kwale Operation Debt Facility, reducing the outstanding balance to US$180.5 million.
1 Refer to Base Resources’ Annual Financial Report for the year ended 30 June 2016 for a more detailed review.
2 All figures reported in Australian dollars unless otherwise stated.
3 Free cash flow is determined as cash flow before net proceeds from issue of shares, debt rescheduling costs, proceeds/repayments of borrowings and payments to the debt service reserve account