Jubilee Metals Group PLC (AIM:JLP, JSE:JBL, OTC:JUBPF) reported higher revenue, lower profit but stable cash flow as it navigated a year when the basket of platinum group metals (PGM) prices dropped sharply.
The company countered the fall in PGM prices by expanding its chrome operations into higher-margin offtake agreements, resulting in a £12.5 million cash position at year end and strong cash generation of £31 million.
Record production of PGM, chrome and copper in the year to June led to revenue from operations increasing 1% to £142 million (down 8% in dollar terms to US$171 million) with growth in USD chrome revenue mostly offsetting the market price effect on PGM sales.
The average PGM basket prices decreased 22% to US$1,262.
Underlying profits (EBITDA) decreased 33% to £24.8 million and earnings per share by 35% to 0.48p.
Chief executive Leon Coetzer said: "I am pleased to report another year of significant growth at Jubilee in which we have demonstrated our ability to navigate through some challenging infrastructure conditions."
As well as countering the PGM price effect by expanding chrome operations into higher-margin offtake agreements, he said investments in power infrastructure in South Africa and Zambia were "crucial in addressing power outages and stabilizing supply, while a new private water infrastructure investment resolved disruptions issues at the Roan operations".
Looking forward, Coetzer said the company also is committed to improving operational efficiencies, while the South African operations continue to maintain their status as one of the lowest-cost PGM producers.
New processing partnerships aim to boost margins and capacities, he added, while investments in Zambia target growth in copper output and offer near-term expansion prospects.
For 2024, there is a targeted production for South Africa of an additional 60,000 tonnes of high-margin chrome concentrate in the first half, bolstering profitability, with full-year guidance reaffirmed for 1.45 million tonnes of chrome concentrate.
In Zambia, the company noted innovations with modular circuit designs for copper recovery from processing the weathered and transitional copper 'reefs' that are traditionally discarded as waste, with these additions planned as part of the Roan upgrade.
On the PGM front, Jubilee is enhancing existing efficiencies and exploring joint ventures as it reassesses the construction of a new PGM facility amid the prevailing basket prices.
As part of this decision the construction of a new PGM facility in the eastern limb of South Africa has been placed under review.