25pc sales decrease on Kwale titanium due to reduced shipments

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The Australian mining firm Base Resources announced a 25.8 percent reduction in revenue from its Kwale titanium operation in the quarter ended December due to reduced customer deliveries.

The firm’s zircon sales, ilmenite, and rutile declined to Sh3.6 billion in the review period compared to Sh4.9 billion the year before.

During the review period, a total of 72,214 tonnes were shipped out compared to 127,328 tonnes a year earlier, constituting a 43.2 percent drop.

Meanwhile, the average price per tonne rallied 30.7 percent to $464 (Sh51,000), but this was insufficient to boost the turnover.

The higher prices have been a response to increased demand from pigment producers, a titanium derivative used in various applications such as coating and painting.

The production of the operation dropped by 13.3 percent to 103,864 tonnes from 119,687 in the previous year.

Base Resources says that it was owed VAT refunds amounting to $16.6 million (Sh1.8 billion) as of December 31, 2020. The assertion arises from both the construction of the mining project and ongoing operations at the facility.

During the quarter under review, Base Resources had received refunds valued at $2 million (Sh220 million). It plans to be more assertive in accelerating collections of the money owed by the Kenya Revenue Authority.

“Base Resources is continuing to actively engage with the Kenyan National Treasury and the Kenya Revenue Authority in relation to the outstanding VAT refund claims and is also taking steps under the investment agreement to secure its position with respect to the VAT paid during construction of the Kwale Project,” the company said.

 

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Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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