Base Resources - Record revenue and major project acquisition drive growth in FY18
Base Resources (ASX:BSE) has released its full-year results for the 12 months to June 30, with record revenue and net profit after tax. During the 2018 financial year, Base increased net profit by 114 per cent to $US34 million while revenue grew 22 per cent to $US198.8 million. Net debt was reduced by $US65 million to $US33.2 million. During the reporting period, Base progressed its long-term strategy with the acquisition of the Toliara sands project in Madagascar, and optimised its Kwale operation in Kenya.
Price increases and consistent sales volumes across all products drove record revenue and NPAT for the year ended 30 June 2018 (FY18) for Base Resources (ASX and AIM: BSE). The Company also progressed its long-term strategy with the acquisition of the Toliara Sands Project in Madagascar and optimisation of the Kwale Operation in Kenya.
Operational Highlights for FY1
• Total Recordable Injury Frequency Rate of zero – no lost time due to injury since 2014;
• Consistent production – 91,672 tonnes of rutile, 464,988 tonnes of ilmenite and 37,157 tonnes of zircon;
• Average price improvement across all products – rutile up 17%, ilmenite up 28% and zircon up 46%;
• Completed a major optimisation project at the Kwale Operation to maximise production volumes;
• Kwale South Dune Measured and Indicated resources increased by 19%;
• Acquisition of the Toliara Sands Project in Madagascar and commencement of pre-feasibility study; and
• US$3.8m invested in community and environment programs.
Financial Highlights for FY18
• Revenue increased 22% to US$198.8m;
• EBITDA increased 32% to US$109.3m;
• NPAT increased 114% to US$34.0m;
• Net debt reduced by US$65.3m to US$33.2m; and
• Revenue to cost of sales ratio of 2.8:1.
Managing Director of Base Resources, Tim Carstens, said: “This has been an outstanding year for Base Resources with our team achieving the goal of a total recordable injury frequency rate of zero – a fantastic outcome for any resources operation globally and testament to the quality of our management team.”
“Consistent production and strong average price improvement across all products contributed to record financial results for the Company and has allowed significant debt reduction and established a strong platform from which to grow the business. The well-timed acquisition of the Toliara Sands Project in Madagascar has given Base Resources an outstanding growth path in the development of another world-class mineral sands project with a long production life.”
Priorities for the 2019 financial year include:
• Completion of the pre-feasibility study for the Toliara Sands Project and commencement of the definitive feasibility study, ahead of a planned final investment decision in late 2019;
• Pursuing mine-life extension at the Kwale Operation with continuation of the current encouraging exploration drilling program; and
• Retirement of the Kwale Project Finance Facility.
As stated in the June Quarterly update, Base Resources expects to produce from its Kwale Operation in FY19:
• Rutile – 88,000 to 93,000 tonnes;
• Ilmenite – 420,000 to 450,000 tonnes; and
• Zircon – 32,000 to 37,000 tonnes.