Home » Goldplat Reports Profit Growth Amid South African Challenges

Goldplat Reports Profit Growth Amid South African Challenges

Firm Overcomes Power Cuts, Boosts Ghana Operations Revenue

by Ikeoluwa Ogungbangbe
Goldplat profit growth

Gold recovery company Goldplat has continued to shine in the financial spotlight, recording profitable results for the six-month period ending December 31, 2023, despite facing operational challenges in South Africa. The Aim-listed firm, which operates in both South Africa and Ghana, has once again demonstrated resilience and strategic acumen under the leadership of CEO Werner Klingenberg, as revealed in their unaudited interim results statement.

During this period, Goldplat reported a robust operating profit of £2.97 million, an increase from the £2.81 million recorded in the same period of the previous year. This financial uplift comes in the wake of an impressive 82% surge in revenue, reaching £37.40 million up from £20.6 million in the prior comparable period. The growth was significantly buoyed by the company’s operations in Ghana, which saw a remarkable 167% revenue increase. This boost was largely due to the sale of high-grade, low-margin material that had accumulated due to export license delays in the latter half of the previous financial year.

In contrast, the South African operations faced a 9% decline in revenue, primarily due to the frequent electricity cuts that plagued the region, along with a reduction in by-products received from current mining operations. These challenges were compounded by delays experienced at a European smelter in the previous financial year, leading to an unusually large stockpile of material for processing, which contained a lower percentage of gold than estimated.

Goldplat’s proactive strategies and adaptability were evident in its response to these challenges. The company has actively pursued an increase in its market share of by-products in South Africa and sought to expand its operational footprint to neighboring countries. Despite facing a shortfall of about £600,000 on the gravities, Goldplat reported a net profit from continued operations attributable to the company’s owners of £1.17 million, with fully diluted earnings per share at 0.70p. Moreover, the company maintained a strong net cash balance of £1.69 million.

Investment in capital expenditure during this period totaled £793,000, primarily directed towards the construction of a new tailings storage facility in South Africa and the refurbishment of one of the circuits. Anticipating the ongoing uncertainty of electricity supply in the medium term, Goldplat also decided to invest in diesel generators to ensure operational sustainability during power cuts. However, due to a miscommunication between the supplier and the manufacturer, the shipping of the generators has been delayed, pushing the project’s completion to the fourth quarter of the current financial year.

Goldplat’s journey through the first half of the fiscal year 2023-2024 paints a picture of a company that, despite facing significant operational headwinds, particularly in South Africa, has managed to not only sustain but grow its profitability. This has been achieved through strategic decisions, particularly in Ghana, which have offset the challenges faced in South Africa. The company’s adaptability to unforeseen challenges, such as electricity supply issues, and its proactive measures to mitigate these impacts underscore its resilience and commitment to sustainable growth.

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