Jubilee Metals sustains operational performance as profits fall

Jubilee Metals Group said in its final results on Wednesday that it managed to sustain a robust operational performance that mitigated the adverse impacts of depreciating platinum group metals (PGM) basket prices and infrastructural dilemmas in its operating territories.

The AIM-traded firm reported a modest 1% rise in revenue from operations, reaching £142m, whereas gross profit declined to £31m.

That reduction in profit was primarily due to a 22% plunge in average PGM basket prices, an 11% uptick in operating costs per PGM ounce, a drop in copper revenue per tonne, and a slight decrease in chrome margins during the first half.

Furthermore, EBITDA and cash from operating activities reduced to £24.8m and £31m, respectively.

On a brighter note, the firm achieved several notable milestones and advancements throughout the year, including producing record figures across its PGM, chrome, and copper operations.

Implementing a £36m investment programme aimed at diversifying and amplifying operations across various metal sectors was particularly noteworthy.

A state-of-the-art PGM processing facility, designed to reprocess PGM tailings and ores previously deemed as waste, was commissioned, boasting a potent annual production capacity of 44,000 ounces of PGMs.

In response to infrastructural hurdles, Jubilee took several steps, such as installing backup power units at its chrome facilities in South Africa and effectively addressing infrastructure issues at the new Roan Concentrator.

Moreover, in Zambia it attained significant breakthroughs in treating mixed and transitional copper reefs, offering promising lower capital expansion opportunities within the region.

“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,” said chief executive officer Leon Coetzer.

“The company successfully countered the sharp drop in the PGM basket price by expanding its chrome operations into higher-margin offtake agreements, resulting in a robust net cash position and strong cash generation.

“Investments in power infrastructure in South Africa and Zambia were crucial in addressing power outages and stabilising supply, while a new private water infrastructure investment resolved disruptions issues at the Roan operations.”

Coetzer said the company’s success could be attributed to the “unwavering dedication” of its employees, strategic investments, and agility in addressing challenges.

“The company remains committed to delivering value to stakeholders and strengthening our market position, and I continue to have every confidence our investments will generate significant returns for shareholders in the short and long term.”

At 1258 BST, shares in Jubilee Metals Group were down 12.3% at 6.14p.

Reporting by Josh White for Sharecast.com.