Australian mining firm Base Resources, the mining agency handling operations at Kwale’s titanium mines, garnered net profit worth Ksh. 4.96 billion from the Kwale unit in the first six months of the year.
According to the Business Daily, revenue generated from the Kwale mines balanced out losses worth Ksh. 25.7 million that Base Resources incurred from its Madagascar mines as well as a Ksh. 881 million net loss from the firm’s other operations. The offset from the Kwale mines earnings enabled Base Resources to post a Ksh. 4.1 billion net profit in the first six months of the year up from Ksh. 3.5 billion registered in a similar period last year.
During the period under review, sales revenue from Kwale titanium exports grew 5.4 percent from Ksh.20.5 billion to Ksh.21.7 billion and the firm has attributed the success of the Kwale mines in the first six months of 2019 to effective cost cutting and a reduction in distribution costs. Operating expenses dropped to Ksh. 1.1 billion down from Ksh. 1.8 billion recorded in the first six months of 2018 while debt servicing costs also dropped to Ksh. 1 billion from Ksh. 1.64 billion in the first half of last year.
“Improved commodity prices and a continued focus on cost management has delivered a Kwale Operations EBITDA (Earnings before interest, tax, depreciation and amortization) for the reporting period of $120.3 million, a five percent increase over the comparative period,” Base Resources said in its latest investor update.
The improved sales also signaled better royalties for the government which is entitled to 2.5 per cent of the export values made by Base Resources. In the financial year ended June, the Kenyan government earned Ksh. 1.5 billion in royalties up from Ksh. 1.4 billion in 2018.