(NEWZIMBABWE) RioZim revenues increase 43 percent
04/06/2013 00:00:00
by Roman Moyo
MINING Giant, RioZim Limited’s revenue for the first quarter of the year grow 43 percent to US$22,6 million in this year’s first quarter the company’s CEO Asthton Ndlovu has revealed.
Ndlovu told the company’s recent AGM that RioZim expects to ramp up gold production by 5,2 percent to 715 kilogrammes, nickel output is seen 1,209 percent up at 3 789kg while copper is expected to jump 421 percent to 4,723kg.
“Full year turnover grew by 33 percent. The growth was accelerated in the second half where a turnover growth of 69 percent was achieved in comparison to the same period last year. ENR revenue for the year grew by 40 percent over the same period last year due to the sale of own metals (as opposed to) toll manufacturing,” Ndlovu said.
Operating profit jumped a staggering 415 percent to US$4,6 million while net losses declined 48 percent to 7,4 million.
Things are certainly looking up for a firm that, only 12 months ago, was choking under a US$90 million debt with US$60 million of this owed to banks, as the threat of liquidation hovered above.
Earnings before interest, tax, depreciation and amortisation jumped 124 percent to US$518,000 while operating profit grew by 117 percent to US$390,000.
Hitherto, RioZim had seen turnover jumping 33 percent to US$72,3 million while earnings before interest, tax, depreciation and amortisation skipped 317 percent to US$6,9 million in 2012.
Debts have since decreased by 24 percent due to repayments and restructuring of short-term debt to long-term liability.
The gearing ratio improved by 37 percent in 2012. Against the odds posed by the prevailing liquidity crisis, RioZim successfully raised US$11,6 million through a rights issue and private placement.
However, capital constraints remain the company’s biggest hurdle on planned projects due to the fact new foreign shareholders, GEM Raintree, at the moment cannot commit equity capital without breaching the Indigenisation and Economic Empowerment Act, a poser management is grappling to find a solution.
Government has since been engaged on this issue, Ndlovu said.
Meanwhile, as further evidence of changing fortunes at the company, RioZim has managed to commit slightly over US$28 million towards settling its principal loan and interest obligations to financial institutions.
And RioZim directors have noted the progress achieved thus far and will test their resolve this year against more ambitious targets.
Corporate restructuring, which is only part of several strategic initiatives lined up by the group for 2013, is gathering speed with completion expected in the second quarter of the year.
RioZim will hold a majority stake in the 5 new entities (Rio Gold, Rio Base Metals, Rio Diamonds, Rio Energy and Rio Chrome) whilst utilising the remaining 49 percent shareholding to raise capital, acquire assets and or source expertise.
Labels: ASHTON NDLOVU, GOLD, MINING, RIOZIM
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(NEWZIMBABWE) RioZim Limited looks to double revenues
15/04/2013 00:00:00
by Rebecca Moyo
LISTED miner, RioZim, is forecasting revenue growth of US$185 million by December this year from US$72 million last year a 157 percent increase
Acting chief financial officer Beki Nkomo told a briefing in Harare Monday that the group was optimistic because to meet its targets.
EBITDA for the year to December is expected to increase by 229 percent to US$23 million from the US$7 million reported in last year.
Operating profits would also rise to US$16 million, a 251 percent increase while earnings per share would be up 294 percent to 23,5c.
The group says last year it had taken a US$726,000 knock on retrenchment costs while making a profit of US$175,434 from the sale of the Msasa building.
The retrenchment exercise would result in cost savings of US$2 million per year.
Turnover grew 33 percent to US$72 million with over half of it coming in the second half of the year at US$41,4 million.
EBITDA was up 37 percent to US$6,9 million while the group managed to report an operating profit of US$4,63 million from a loss of US$1,47 million at the end of 2011.
However, huge finance costs at US$11,8 million saw the group report a loss of US$7,47 million.
Ndlovu said 2012 had been a difficult year for the company.
The group started the year saddled with a US$91 million debt, US$60 million of which was owed to the banks at high interest rates. Five of the major banks were seeking judicial management.
“We haven’t been able to put much cash back into the operations as we were battling to reduce the debt burden,” the official said.
The group also had a weak procurement system as there were huge mark-ups on goods supplied while production was low at Renco and ENR was stuck in a loss making toll refining agreement.
However to get round this new shareholder GEM brought in a US$6,6 million, Old Mutual had brought in US$5 million which formed a get-out-of-jail capital injection while the group started renegotiating with banks and also applied some of the funds to working capital.
"The Gem group did a strategic overhaul of the business,” Ndlovu said
He said the group was in the process of renegotiating for 24-36 months facilities.
“We have to match repayments with cash as the structure if the debt was straining cash flows. A lot of progress has been made towards addressing the issue and we hope to have closed it in the next two months,” said Ndlovu.
Labels: BEKI NKOMO, RIOZIM
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Mzembi says refused US$100k RioZim bribe
04/02/2013 00:00:00
by Staff Reporter
TOURISM Minister Walter Mzembi, accused by RioZim Limited of trying to seize the firm’s gold mine in Masvingo, has in turn claimed the company offered him a US$100,000 bribe in a bid to buy his silence in an on-going labour dispute with its workers.
The Zimbabwe Stock Exchange-listed group is involved in a labour dispute with workers at its Renco Gold Mine in Masvingo but has accused Mzembi, who is MP for the area, of trying to use the stand-off to seize control of the lucrative mine.
In a statement, RioZim said Mzembi had tried to impose Zanu PF’s Chivi South legislator Irvine Dzingirai as general manager at the mine in an attempted takeover of the company under the guise of the country’s indigenisation laws.
"Minister Mzembi arrived at the mine... He called a public meeting and announced that RioZim had not complied with the indigenisation obligations of the country and hence they were taking over Renco," the company said.
The company also accused Mzembi of using threats and intimidation to bar RioZim directors and management from the mine while denying them access to the company's gold bullion.
But the minister denied the allegations insisting: "That's political slander. I'm surprised by their statement, which seeks to politicise what is a dispute between them and their workers.
"I have no interest in the mine's shareholders except to say they must comply with the laws of this country. I have never taken an ounce of gold from Renco, nor do I intend to, but my people are crying for justice."
And on Tuesday the Masvingo South MP claimed RioZim tried to buy his silence with a US$100,000 bribe, a claim immediately rejected by the firm.
Counter accusations
“They tried to buy me out of this case, with a US$100 000 brown envelope which I turned down, preferring to advance community and worker issues which they have blatantly violated over the past 40 years,” Mzembi told the Herald newspaper.
“I am not that cheap neither is my constituency worth so little, after four decades of gross neglect and abuse. They must try someone else.
“I will not be bought with filthy lucre to sell an entire constituency’s aspirations and dreams about development which they clearly see being implemented more responsibly by other corporates like Zimplats and Unki in areas where they are operating.”
The claim was dismissed by RioZim chief executive Ashton Ndlovu, who said: “I do not know where the minister is getting that (bribery allegations) from.
“Any money spent by the company is accounted for because we are public listed company. All the money we give out is not given to individuals.”
Mzembi said he would continue to press for better working conditions for the mine’s workers.
“This is a classic case of trying to prevent me from exercising my legitimate role of interceding on behalf of the community in their dispute with RioZim shareholders,” he charged.
“I will not dignify corporate political slander on my person, neither will I be intimidated by litigation from exercising my representative role as Member of Parliament.
“I have no intention of owning a mine, my plate is already full, with my calling to represent the people, but if they expect me to turn a blind eye to exploitation of our people, then they have got it wrong.”
Renco - formed in 2004 when Rio Tinto Plc sold off most of its Zimbabwe assets - produced 11 000 ounces of gold in the first half of 2012, when it resumed operations after shutting down at the height of Zimbabwe's hyperinflation crisis in 2008.
RioZim owns Empress Nickel Refinery, 50% of Sengwa Colliery, several exploration claims and a 22% stake in Murowa Diamonds.
The company was saddled with $50m of debt and on the verge of collapse in 2012 but was saved when New York-based private equity fund Global Emerging Markets took a 25% stake.
Labels: BRIBERY, CORRUPTION, RIOZIM, WALTER MZEMBI
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RioZim MD steps down
Monday, 26 March 2012 00:00
Martin Kadzere Senior Business Reporter
RIOZIM managing director Mr Josh Sachikonye is set to step down, as shareholders approved the US$55 million capital raising initiatives. RioZim chairman Mr Tichaendepi Masaya said Mr Sachikonye, who has been at the helm of the diversified resource firm since 2004, would step down with effect from March 31 this year.
The new managing director will be announced at the company’s annual general meeting in May. No reasons were given for Mr Sachikonye’s resignation.
But the market had previously speculated about Mr Sachikonye’s imminent departure.
With approvals from the shareholders, RioZim will raise US$5 million through issuance of 10 million rights issue shares at US50c.
Another US$5 million would be raised through private placement of about 13 million shares to Global Emerging Markets. An additional US$45 million would be raised via convertible debt to GEM Raintree, a Mauritius-based firm, who will also underwrite the rights issue.
The convertible debentures would be drawn over the next five years to finance existing operations, settle debts and for recapitalisation.
Shareholders voted 91,9 percent in favour of the rights issue while 92,93 percent and 92,64 percent of the shareholders approved the private placement and the issuance of convertible debentures respectively.
About 74 percent of the shareholders were present.
RioZim director Mr Richard Tait told shareholders that the company managed to persuade the majority of the creditors to restructure the debt, while negotiations were in progress with some creditors.
Some RioZim creditors had applied for the provisional judicial management of the company. RioZim owes several local banks close to US$60 million.
The EGM was thrown into doubt last week after the Securities Commission of Zimbabwe expressed dissatisfaction with some sections of the circular detailing the RioZim recapitalisation.
Last year, RioZim held an EGM to consider the US$59 million cash call but it was rejected by shareholders as about 47 percent of the shareholders said “No” to the rights offer while 32 percent voted in favour.
RioZim requires fresh capital to retire debt and recapitalise operations. The company traded at US45c on the ZSE last Friday.
Labels: RIOZIM
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Concern over RioZim recapitalisation plan
16/03/2012 00:00:00
by bloomberg.com
THE Securities Commission of Zimbabwe said it is concerned that a proposed $55 million recapitalization plan by RioZim doesn’t provide sufficient information for shareholders to make their own assessment.
“There is need for disclosure on RioZim’s entire debt maturity profile so that investors and shareholders can make their own assessment on which debt might need early retirement,” Tafadzwa Chinhamo, the regulator’s chief executive officer, said in a statement published in the Newsday newspaper.
Without that transparency, it’s possible that all the money will be “channelled straight towards debt retirement, thus leaving the company with no working capital, a position which led to the current situation.”
“It’s not a big issue,” Josh Sachikonye, RioZim’s managing director, said in a phone interview from Harare. “We’ve met with the commission and we’re resolving that.”
A plan by the Harare-based gold and diamond miner to raise $40 million through a rights offer failed last year.
RioZim blamed Zimbabwe’s black empowerment laws, which require companies to be majority-owned by black Zimbabweans, for scaring investors. Subsequent newspaper reports said the miner had debts of between $40 million and $59 million. RioZim is due to hold an extraordinary general meeting next week.
Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), RIO TINTO, RIOZIM
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RioZim acts on US$50 million debt
By Bright Madera
Wednesday, 18 May 2011 21:42
RIOZIM Limited says it is restructuring its US$50 million debt by converting its metal stocks into cash in the next 12 months. Managing director Mr Josphat Sachikonye told Herald Business the group's operations were in a profitable mode. The company would use internal resources to settle its debts.
"We are in the process of restructuring our debt and we are also going to convert our huge metal stocks into cash and be able to retire our local expensive debt in the next 12 months," he said.
"We are also expecting Empress Nickel Refinery to be profitable and generate cash, which would be expanded to retire the local debt."
He said the group still required a strategic partner and joint ventures to undertake growth projects.
RioZim said it was pinning its hopes on the collapsed Essar Africa Holdings deal. Essar had planned to take control of 51 percent of the company.
RioZim had wanted Essar to underwrite its intended US$40 million rights issue, of which US$15 million was to be channelled towards debt repayment.
Mr Sachikonye also revealed that they were negotiating with potential investors after the fallout with Essar.
"We are talking to serious investors, who have shown interest in investing in the company, but I cannot divulge the details," he said.
On recent reports that several banks were exposed to risk after RioZim borrowed US$50 million, Mr Sachikonye said in a statement the group's resources, asset base and capacity to produce were considered sufficient to cover the current exposure to the banking sector.
"The debt situation has always been made public as published in the audited financial statements for the year ended 31 December 201," he said.
"RioZim has not defaulted with any bank and is servicing its debts on terms and conditions agreed with the various financial institutions. It remains a viable company with sufficient resources and capacity to perform well in future and deliver value to its shareholders."
In the short term, the company is buoyed by prospects at Cam and Motor Gold Mine with an estimated one million ounces of proven gold deposits.
Darwendale Chrome deposits also confirmed the existence of an inferred alluvial resource in excess of six million tonnes of ore.
Further developments at Renco are expected to uplift production to 44 000 ounces a year.
RioZim are sitting on an asset base of US$200 million, Sengwa coal deposits (1,3 billion tonnes), a 22,2 percent interest in Murowa Diamond Mine, Cam and Motor Gold Mine, Darwendale Chrome deposits and Empress Nickel Refinery.
Investment analysts yesterday said RioZim remained an attractive company given its potential and mineral deposits.
They said most companies had been borrowing and that there had been no substantial fresh capital into companies since the introduction of the multiple currency system.
Most companies have been struggling to retire expensive local debt and to attract fresh capital.
"Very few companies have managed to capitalise because there has been minimal fresh capital into companies," said an investment advisor with a local bank.
"There are a number of micro-economic issues when it comes to refinancing debt."
Labels: JOSPHAT SANCHIKONYE, RIOZIM
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Essar plans on RioZim crumble
Monday, 04 April 2011 21:21
By Martin Kadzere
ESSAR Africa Holdings' plans to buy a 51 percent stake in the Zimbabwe Stock Exchange -listed RioZim have collapsed because the deal would have violated the indigenisation and empowerment laws.
Herald Business understands that RioZim wanted Essar to underwrite its US$40 million rights issue. But the Indian firm insisted on buying 51 percent equity of the diversified resource firm.
The collapse of the deal comes at a time when Essar, which recently acquired 54 percent of the Zimbabwe Iron and Steel Company, is evaluating options to
capacitate Hwange Colliery and Zesa Holdings.
Essar wants the acquisition to work to its advantage by ensuring it gets enough supplies of coke from Hwange and uninterrupted power supplies from Zesa when Zisco resumes operations in the next one-and-a-half years.
RioZim managing director Mr Josphat Sachikonye confirmed to a local news agency last week that the Essar-RioZim equity deal had collapsed.
Mr Sachikonye said the deal was off because Essar was insisting on buying a 51 percent stake, which would have been in conflict with the indigenisation laws.
The laws stipulate that foreigners cannot own more than 49 percent shareholding in Zimbabwean companies.
"We have been talking to them (Essar) about the possibility of investing in RioZim," he said.
"Essar wanted 51 percent of RioZim but there is no room for that. If the law says you cannot do that, then you cannot do that. You cannot be a majority shareholder in a local company."
The acquisition of Ziscosteel by Essar was excluded from the indigenisation and empowerment law. Essar also sought to build a power station at Sengwa in a project requiring a staggering US$3 billion.
The power would then be fed into the Ziscosteel Redcliff plant that Essar now runs.
Last year, RioZim shareholders approved the US$40 million rights issue in an exercise aimed at transforming the group's mining operations. The rights issue is probably the biggest cash caller on the local market by a single company since the country adopted the multi-currency system.
RioZim intends to use most of the funds to finance new mining projects, including reviving the Cam and Motor Gold Mine in Kadoma.
Labels: ESSAR AFRICA HOLDINGS, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), RIOZIM
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RioZim mulls US$3bil power project
by Business reporter
19/05/2010 00:00:00
MINING firm Rio Zim says it has secured the support of South African investors for the construction of a US$3 billion thermal power plant which is expected to go a long way in helping address the country’s power supply problems.
Rio Zim - which is listed on the Zimbabwe Stock Exchange (ZSE) - sits on 1.3 billion tonnes reserves of coal in the country’s Gokwe area where it jointly owns the Sengwa Colliery with Rio Tinto PLC.
Managing director Josphat Sanchikonye said on Tuesday feasibility studies into the power project were already underway but noted that prospective investors had raised concerns over the country’s new empowerment regulations.
Sachikonye said the power station would have a capacity of 1400 megawatts, enough to meet Zimbabwe's electricity demand which is currently 35 percent met by imports.
''A consortium of South African companies is keen to partner us to operationalise the project. All that is left is for the government to make sure the rules are favourable to guarantee investment security to our partners,'' he said.
Sanchikonye said construction of the power plant was tentatively pencilled to start next year, with the first units expected to begin generating electricity by 2014.
The company completed feasibility studies for what was to be the Gokwe North Power Station in 1997 but implementation of the project was put on hold in 1999 due to funding constraints.
At the moment, Zimbabwe suffers severe power shortages, and has resorted to rationing supplies to both domestic and commercial users.
The country imports power from Mozambique, the DR Congo, South Africa as well as Zambia.
Labels: ENERGY, JOSPHAT SANCHIKONYE, RIOZIM
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