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OZ Mineral Limited (ASX: OZL) announced its FY2018 financial results on 27 February 2019 after meeting production expectation of Q3 2018. The company reported revenue of A$1,117 million, up by 9% as compared to the previous year FY17, which reported the revenue at A$1,023 million. However, the cost of goods sold marked a surge from A$440 million in FY17 to A$502 million in FY18. As per the company, the high cost of goods sold is associated with the inclusion of Antas and higher power cost. The company also marked an increase in exploration expense from A$21 million in FY17 to A$67 million in FY18. The exploration project included West Musgrave, Carrapateena province.
The Underlying EBITDA increased from A$539 million in FY17 to A$540 million in FY18. The company also marked an increase in net depreciation due to the inclusion of Antas. The net depreciation for FY18 was noted at A$228 million as compared to A$218 million in the previous corresponding period. The underlying EBIT decreased from A$321 million in FY17 to A$312 million in FY18.
The underlying NPAT decreased from A$231 million in FY17 to A$228 million in FY18, despite an effective tax rate of 29%. The net interest and tax decreased from A$90 million in FY17 to A$84 million in FY18. NPAT included additional growth investment expensed, and the company allocated exploration spend of A$30-A$35 million, which would be fully expensed in 2019. The company had also allocated A$45-A$50 million for project studies and drilling commitments, and it is expected to be around 65% expense in 2019.
Liquidity Profile:
The company reported the opening cash at the beginning of FY18 as A$729.4 million and marked a cash inflow from operations of A$655 million and cash inflow of A$12 million as net interest income. The company also marked a cash inflow of A$3.4 as an effect of exchange rate changes.
The company marked a cash outflow of A$68 million as payment for exploration and A$149 million as income tax. The company marked a cash outflow of A$335 million on Carrapateena, A$59 million outflows on Prominent Hill Mine development and A$183 million cash outflow on Avanco acquisition.
The companyâs sustaining capital expenditure marked a cash outflow of A$13 million and other capital expenditure, marked a cash outflow of A$20 million. During the financial year FY18, the company paid A$67.6 as the dividend. The total activity of the company led to the closing cash of A$505.1 million at the end of FY18.
Financial Picture:
The company reported total assets of A$3,443 million, up by approximately 21.80% as compared to the previous corresponding year, which marked the total asset of A$2,826 million. The total liabilities of the company reported at A$528 million as compared to A$310 million in FY17, which led to the net assets of A$2,915 million in FY18 as compared to A$2,516 million in FY17.
FY19 production guidance:
The company has set its production guidance for copper from the Prominent Hill in the range of 95,000-105,000 tonnes and Carrapateena in the range of 2,000-4,000 tonnes leading to total production guidance of 97,000-109,000 tonnes.
The gold production guidance for FY19 from Prominent Hill was noted in the range of 115,000-125,000 ounces and Carrapateena in the range of 3,000-6,000 ounces leading to total production guidance in the range of 118,000-131,000 ounces.
On 24 January 2019, the company released its fourth-quarter report ending 31 December 2018.
On 30 January 2019, OZ Minerals notified that it had entered into an exploration alliance with Red Metal Limited (ASX:RDM) which would significantly increase its exploration footprint in Australia.
By the closure of the trading session, the stock price of the company stood at A$10.610 (as at 27 February 2019), down by 0.934% from its previous close.
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