Copper 360 Reports Sharp Earnings Drop

Copper 360 Limited anticipates a significant decline in earnings. The company’s financial results for the year ended 29 February 2024 show earnings per share (EPS) expected between (10.5) cents and (12.0) cents. This is a sharp drop from the previous year’s EPS of (0.27) cents.

Headline Earnings Also Expected to Fall

Headline earnings per share (HEPS) for the same period are also forecasted to be between (10.5) cents and (12.0) cents. Last year’s HEPS was (0.27) cents.

Loadshedding and Plant Upgrades to Blame

The earnings decrease is attributed to several factors. The primary reasons are loadshedding-related plant stoppages and a three-month halt for upgrading the SXEW plant. Additionally, low recovery rates have affected earnings.

Limited Trading Last Year

The previous year’s figures were from Shirley Hayes-IPK (Pty) Ltd, which had limited trading. This was presented in terms of IFRS 3 – Business Combinations.

Financial Forecast vs. Actual Results

Discrepancy in Forecasted Earnings

Copper 360 had previously forecasted a profit for the financial year ended 29 February 2024. However, the actual results deviate significantly from the forecast.

Forecasted vs. Actual Earnings Per Share

Forecast (cents)Actual (cents)
EPS2.9(10.5) to (12.0)
HEPS2.9(10.5) to (12.0)

Revenue Shortfall

The forecast discrepancy is mainly due to revenue not being realized as expected. Lower than expected plant feed tonnes and poor recoveries contributed to this shortfall.

Delays in Production and Regulatory Approvals

Nama Copper Acquisition Delayed

The delay in regulatory approval of funding for the acquisition of Nama Copper impacted earnings. Originally, production was planned to start in December 2023. However, processing could only begin in March 2024.

Impact on Concentrate Revenue

No concentrate revenue was realized during the period, affecting the company’s earnings forecast.

Challenges Faced by Copper 360

Loadshedding Issues

Loadshedding-related stoppages have significantly impacted plant operations and earnings.

Plant Upgrade Delays

The upgrade of the SXEW plant necessitated a three-month stoppage. This affected production and earnings.

Crushing Capacity and Acid Solubility Issues

Inadequate crushing capacity and low acid solubility also contributed to lower than expected recoveries.

Looking Ahead

Future Plans

Copper 360 is addressing the issues faced during the past financial year. Plans to improve crushing capacity and recoveries are underway.

Positive Outlook Despite Challenges

Despite the challenges, the company is optimistic about future production and earnings. The acquisition of Nama Copper is expected to enhance production capabilities.

Conclusion

Copper 360’s earnings for the year ended 29 February 2024 are expected to drop significantly. The company faces several operational challenges, including loadshedding and plant upgrade delays. Despite these challenges, Copper 360 is working on improving its operations and production capabilities.