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Highlights:
- Eastern Platinum reports a 49.5% drop in Q3 2024 revenue, compared to Q3 2023.
- Operating loss of $5.7 million in Q3 2024, reversing last year’s profit.
- Company focuses on improving recoveries and operations at Crocodile River Mine.
Eastern Platinum Limited ("Eastplats" or the "Company"), a leading South African platinum group metals (PGM) producer, has announced its financial results for the three and nine months ended September 30, 2024. The Company has reported a significant decline in both revenue and profitability for the third quarter and year-to-date periods, attributing the results to lower chrome sales and operational challenges.
For the third quarter of 2024 ("Q3 2024"), Eastplats reported total revenue of $11.0 million, a sharp decrease from the $21.8 million recorded in Q3 2023. This represents a 49.5% year-over-year decline in revenue. The decrease was primarily driven by lower chrome sales, as the Company faced reduced demand and pricing pressures. Similarly, for the nine months ended September 30, 2024 ("YTD 2024"), revenue decreased by 40.5% to $45.5 million from $76.5 million in the same period of 2023.
Mine operating income for Q3 2024 fell into a loss of $1.0 million, a significant decline from the $7.0 million of operating income posted in Q3 2023. This was due to a reduced gross margin, which turned negative at -9.4% for the quarter, compared to a positive 32.1% in Q3 2023. For the nine-month period, mine operating income also decreased sharply, dropping 63.4% to $8.7 million, down from $23.8 million in YTD 2023.
Eastplats incurred an operating loss of $5.7 million in Q3 2024, reversing the $3.6 million operating income it recorded in the same quarter of the previous year. The Company’s YTD operating loss was $4.1 million, compared to an operating income of $15.8 million in YTD 2023.
Net loss attributable to equity shareholders in Q3 2024 was $3.4 million ($0.02 loss per share), compared to net income of $3.1 million ($0.02 earnings per share) in Q3 2023. The decrease in net income was attributed to lower chrome sales, although this was partially offset by a decrease in finance costs and a favorable foreign exchange gain due to the strengthening of the South African Rand.
For the year-to-date period, the Company reported a net loss attributable to equity shareholders of $0.8 million ($0.00 loss per share), compared to net income of $10.4 million ($0.06 earnings per share) in YTD 2023. The decline in profitability was mainly driven by lower gross margins from chrome sales.
As of September 30, 2024, Eastplats had a working capital deficit of $26.6 million, a sharp increase from the deficit of $15.5 million reported at the end of 2023. The Company’s short-term cash resources stood at $8.5 million, down from $21.3 million at year-end 2023, indicating a tighter liquidity position.
Wanjin Yang, CEO and President of Eastplats, provided an update on the Company's operations and future outlook. Yang emphasized the Company’s efforts to ramp up production at the Zandfontein underground section of the Crocodile River Mine, with a focus on producing high-grade platinum group metals (PGM) and metallurgical chrome concentrate. As Eastplats looks toward the remainder of 2024 and into 2025, Yang highlighted the Company’s commitment to improving recoveries and enhancing operational efficiency to address the challenges of the current year and improve financial performance.
Despite a challenging Q3 and YTD 2024, Eastern Platinum remains focused on its long-term goals of improving operational efficiency and stabilizing its revenue streams, particularly through its PGM and chrome operations. With a strong emphasis on ramping up production at the Crocodile River Mine, the Company is optimistic about improving its performance in the coming quarters and beyond. However, its current financial position and the challenges faced in the chrome market highlight the need for continued operational improvements and strategic focus as Eastplats looks to regain profitability in 2025.
Eastplats shareholders and analysts will be closely monitoring these developments as the Company navigates through this difficult period.
