Victoria Falls Stock Exchange listed Padenga Holdings Ltd. has reported a 33% increase in revenue to US$99.24 million for the half-year ended June 30, 2024 despite Zimbabwe’s ongoing electricity challenges.
The El Nino-induced drought has significantly impacted Zimbabwe’s mining sector, particularly due to electricity challenges.
Zimbabwe relies heavily on hydropower from Kariba Dam, which is severely affected by drought. Lower water levels have reduced electricity generation capacity by more than 70%.
However, the mining and agribusiness conglomerate’s positive performance was driven by record gold prices and increased production volumes.
The company’s Dallaglio gold mining unit recorded a 40% increase in turnover, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) growing 98% due to improved ore grades at Eureka mine and enhanced recovery and plant throughput at Pickstone mine.
“The newly commissioned Pickstone Underground Project Phase 1 contributed 15% of the group’s gold production.
The business also benefited from strong gold prices as the metal repeatedly broke price records during the period.
Padenga’s agribusiness segment, however, faced challenges, with skin harvest volumes declining 20% to 16,973 skins. Skin sales revenue remained resilient, up 2% year-on-year, due to improved skin quality.
To mitigate electricity costs, Padenga has announced plans to implement solar power generation for its mines in the financial year 2025. This move is expected to reduce operating expenses and increase efficiency.
Looking ahead, the company forecasts revenue growth for the financial year 2024, driven by increased production and favourable gold prices. Average gold prices are predicted to reach US$2,936/oz by 2027, bolstering revenue upside for gold producers.
The company declared an interim dividend of USc0.40 per share.
The group’s enhanced operational performance resulted in a 110.33% upsurge in EBITDA from US$10.99 million in 1H23 to US$23.11 million in 1H24, with EBITDA margin firming from 14.77% to 23.29%.
The company closed the period under review with a profit after tax of US$9.25 million, a 73% gain from US$5.34 million recorded in 1H23.
